Oklahoma Senate Democratic leaders unveiled a proposal to lower taxes on working families, attract new jobs to the state, and protect Oklahomans’ investment in public schools and health care.
The Democratic program, called “Helping Oklahomans Prosper Economically” or HOPE, combines income and sales tax breaks for individuals and businesses with an expanded incentive plan for new state industries purchasing supplies from Oklahoma companies.
Sen. Jay Paul Gumm, chair of the Senate Finance Committee, said the proposal, when enacted, would provide hope and opportunity for working families and small businesses across the state.
“This plan will strengthen families by putting money back in the pockets of every Oklahoma taxpayer, allow businesses to grow and prosper, and encourage economic expansion throughout the state,” said Gumm, a Democrat from Durant.
“It’s HOPE that will ensure that the next generation of Oklahomans will have a brighter future.”
The plan is in Senate Bill 958, by Gumm, and includes:
A reduction of income taxes for working families by boosting the standard deduction for the first time in two decades;
A sales tax holiday on back-to-school shopping during the same weekend and on the same items as the Texas back-to-school sales tax holiday;
The elimination of taxes on capital gains on Oklahoma-based property for corporations, including small businesses;
A reduction of income taxes for senior Oklahomans by upping the amount of retirement income that is exempt from state income taxes; and
An increase of Quality Jobs incentives for qualifying companies that use in-state suppliers.
Senate Democratic Caucus Chairman Kenneth Corn said the state’s standard income tax deduction has not been increased in nearly two decades.
“Because of that, Oklahomans have paid their income tax on an unfair percentage of their total income,” the Poteau lawmaker said. “Raising the standard deduction for four consecutive years will reduce income taxes and tying that deduction to inflation in future years will create a more fair income tax system for families who need help the most.”
Gumm agreed and said the tax break will help fuel economic growth.
“Working families will spend the money they save back into the state’s economy on Main Street, at the grocery store, and throughout their local communities. And that is good news for every Oklahoma business.”
Creating a “Back-to-School Sales Tax Holiday” weekend in early August will help both families and businesses, by keeping Oklahoma shoppers at home to buy school supplies and clothes.
“In my district and others throughout Oklahoma, people flock across the state line to buy their school clothes and supplies in Texas every year,” he said. “A sales tax holiday will allow parents all over Oklahoma to save money on the items their children must have before school starts and it will keep their back-to-school dollars in Oklahoma.”
Increasing the amount of retirement income that is exempt from state income tax is the next step in an initiative Governor Henry began last year, Gumm said. It will make Oklahoma an even more attractive state for senior citizens, a growing and important part of the state economy.
Eliminating the state income tax on capital gains completes the elimination of capital gains tax on Oklahoma-held property which Governor Henry began last year.
Oklahoma’s Quality Jobs Program has received national acclaim for attracting new companies to the state and creating an incentive for existing firms to increase their high wage workforce.
The HOPE plan expands on the program by increasing Quality Jobs payments to firms whose suppliers bring good paying jobs to Oklahoma.
“It’s a phenomenon known as clustering,” explained Gumm, a former executive director of a local chamber of commerce. “A new factory moves in and brings with it the companies from which it buys the components for the finished product.”
The economic impact of the original facility is multiplied, and instead of the 300 new high-paying jobs lured to the state by the existing Quality Jobs Program you wind up with 500 or even more, he said. The increased Quality Jobs payments are offset in terms of impact on the state budget by revenue from the additional jobs.
“The HOPE plan will strengthen families, boost small businesses, and give every Oklahoma community an opportunity to fulfill its promise,” Gumm concluded. “It will put money back in the pockets of working families and make Oklahoma a more attractive retirement destination.
“It will accomplish all of those things while protecting the state’s ability to maintain its investment in public education, health care, job creation and the services our state’s most vulnerable citizens count on every day.”