Side-by-side tax comparison between Alabama (5% top rate) and Arkansas (4.4% top rate).
| Salary | Alabama | Arkansas | Difference | Winner |
|---|---|---|---|---|
| $50K | $39,673 | $40,648 | +$975 | Arkansas |
| $75K | $57,365 | $58,828 | +$1,463 | Arkansas |
| $100K | $73,640 | $75,590 | +$1,950 | Arkansas |
| $150K | $105,571 | $108,496 | +$2,925 | Arkansas |
| $200K | $138,603 | $142,503 | +$3,900 | Arkansas |
Arkansas offers higher take-home pay at every salary level. Arkansas's 4.4% top rate is more favorable than Alabama's 5%. At $100K, the difference is $1,950/year — that’s $163/month.
However, cost of living matters. Alabama has a cost index of 88 while Arkansas is at 86. With similar costs of living, the tax difference is the main factor.