State senator wants “flat tax” for Oklahomans
It’s part of the great tax debate.
What is the fairest way to collect taxes without killing the budget?
One lawmaker wants to follow the lead of seven other states that have a flat tax.
State Senator Patrick Anderson (R-Enid) said he asked the Oklahoma Tax Commission to come up with a flat tax rate that would not lose revenue for the state.
They came back with a 2.95 percent flat tax.
“There won’t be any budget cuts to any state agency but we would actually be lowering tax rates on all Oklahomans,” Anderson said.
Anderson said Senate Bill 240 wouldn’t allow the state to lose money because it would eliminate all income tax deductions, credits and exemptions.
He said a flat tax is fair.
“Under our current tax system, as soon as you get $10,000 of income, you get hit with the highest tax rate of 5.25 percent,” he said.
But State Representative Scott Inman (D-OKC) said Wednesday those tax credits and exemptions are vitally important.
“That means the child care tax credit is gone,” he said. “The social security tax credit is gone.”
Inman said those tax credit eliminations would mean taxes would actually increase for 75 percent of Oklahomans.
“In fact, a family of four making $24,000 a year, according to the Oklahoma Policy Institute, would see about a $1,000 increase in their taxes,” Inman said.
But Anderson has his own calculation.
He compared two households making $50,000 a year.
He said a single parent with two kids pays $1,953 in state income tax a year, which is $500 more than a married couple with two kids pays; $1,414.
Under the flat tax proposal, Anderson said both households would pay the same amount, in this case, $1,475.
“Is that a fair tax system? No,” Anderson said. “We need to address that.”
Anderson said the state could set up a tax rebate program to subsidize those who end up paying more taxes.
He also said wealthy Oklahomans currently end up paying about 3 percent after taking advantage of the credits and exemptions that he wants to eliminate.
So under his plan, he said the wealthy would pay more.
Inman said other states with a flat tax eventually decided to keep those credits and deductions.