(April 2014) States without capital gains taxes are creating new jobs at a higher rate than the national average in the current economic expansion, according to a Policy Foundation analysis of payroll employment data.
Arkansas taxes income including capital gains, and has a job creation rate less than half the U.S. average since the expansion began in June 2009,1 U.S. Bureau of Labor Statistics data show.
Nine states do not tax income including capital gains.2 Private economies in those nine states, as a group,3 created new jobs at a 8.2% rate versus 5.3% for the U.S. between June 2009 and March 2014, BLS data show.4
Arkansas’ job creation rate was 2.5% in the same period. Only one of the nine states (New Hampshire) had a lower job creation rate, as the following chart shows:
| State | June 2009 | March 2014 | Growth Rate |
| Texas | 10,283,700 | 11,416,600 | 11.0% |
| Florida | 7,221,100 | 7,742,900 | 7.2% |
| Tennessee | 2,605,700 | 2,785,500 | 6.9% |
| Washington | 2,859,100 | 3,029,700 | 6.0% |
| Nevada | 1,144,100 | 1,210,100 | 5.7% |
| United States | 130,944,000 | 137,928,000 | 5.3% |
| Alaska | 319,600 | 335,600 | 5.0% |
| South Dakota | 403,400 | 419,600 | 4.0% |
| Wyoming | 284,900 | 294,600 | 3.4% |
| Arkansas | 1,161,300 | 1,189,800 | 2.5% |
| New Hampshire | 635,900 | 638,000 | 0.3% |
–Greg Kaza
1 National Bureau of Economic Research business cycle chronology
2 Federation of State Tax Administrators. Also see Kyle Pomerleau, “The High Burden of State and Federal Capital Gains Taxes,” Heritage Foundation, Feb. 20, 2013
3 Total nine states that do not tax capital gains: (June 2009) 25,757,500 (March 2014) 27,872,600
4 Private economies in the nine states added 2,115,100 new jobs, more than 30 percent of new jobs in the U.S. (6,984,000).
