A group of Republican lawmakers from the Oklahoma Senate and House of Representatives have introduced a tax cut plan for consideration in the 2014 legislative session that will lower Oklahoma’s individual income tax rate to four percent within four years.
Last year, the Oklahoma Legislature approved a tax rate reduction that would have lowered the individual income tax rate to five percent, but that legislation was struck down late in 2013 by the Oklahoma Supreme Court. As a result of the court’s decision, the Republican government that took office in Oklahoma following the 2010 elections still has not enacted a reduction of Oklahoma’s individual income tax rate, which currently sits at 5.25 percent.
Senate Bill 1849 and House Bill 3291, filed this week, would each lower the state’s individual income tax rate to 4.75 percent on January 1, 2015, then to 4.50 percent on January 1, 2016, 4.25 percent on January 1, 2017, and finally, four percent on January 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, R-Oklahoma City, lead Senate author of SB 1849. “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.”
“Any time hardworking 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, R-Mustang, principal filing author of HB 3291. “The state income tax has been lowered slowly over time from 7% to 5.25%. 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.”
"When we talk about reducing Oklahoma's income tax rate, we're talking about growing the overall economic pie in Oklahoma," said state Rep. Tom Newell, a fellow author of HB 3291. "In order to increase job growth and the level of individual opportunity in our state, we must reduce the penalty we charge on work and productivity. In doing so, we will make it more attractive for employers, both big and small, to invest here."
State Sen. Nathan Dahm, R-Broken Arrow, joins Holt as a co-author of SB 1849. State Reps. David Brumbaugh, R-Broken Arrow, Josh Cockroft, R-Tecumseh, Jon Echols, R-Oklahoma City, Elise Hall, R-Oklahoma City, Mike Turner, R-Edmond, and Harold Wright, R-Weatherford, join Osborn and Newell as co-authors of HB 3291.
SB 1849 and HB 3291 will each be considered in the 2014 legislative session, which begins February 3.