OKLAHOMA CITY – A group of Oklahoma lawmakers have created a pair of bills that they claim would drop the state’s income tax rate and allow Oklahomans to keep more of their money.
Currently, the state’s individual income tax rate stands at 5.25 percent.
Last year, the Oklahoma Legislature approved a reduction of the tax rate that would have lowered the individual income tax rate to five percent.
However, it was struck down in 2013 by the Oklahoma Supreme Court.
“Any time Oklahomans are allowed to keep more of their own hard-earned money, it is a plus for them as individuals and for the state’s economy as well,” said state Rep. Leslie Osborn. “The state income tax has been lowered slowly over time from 7 percent to 5.25 percent. Nearly every time we have lowered the rate, we have seen a commensurate rise in tax revenue to the state’s coffers to fund core services. When people have more of their own money to spend, they invest in their businesses and sales tax revenue increases. It is a win-win situation for the citizens of Oklahoma.”
HB 3291 and SB 1849 would each lower the state’s individual income tax rate to 4.75 percent on Jan. 1, 2015; then to 4.5 percent on Jan. 1, 2016.
It would continue to drop to 4.25 percent on Jan. 1, 2017 and then to 4 percent on Jan. 1, 2018.
“Economic growth and principles of a limited government continue to be held back by our relatively high income-tax rate,” said state Sen. David Holt. “And the problem is even more acute now that we find ourselves in an income-tax sandwich between Texas, which has no income tax, and Kansas, which has lowered its rate below ours. I have introduced a tax-cut bill every year I’ve been in office, and I supported the 2013 tax cut that was later thrown out. But I believe we need to be doing something bolder than was proposed in 2013. We should view the Supreme Court’s decision as an opportunity to be bolder this time.”
Both measures will be considered during the 2014 legislative session.