WASHINGTON — Income tax hikes set to be triggered in January would force Oklahoma consumers to pull back on spending and stunt the growth of the state's economy, according to a White House report released Thursday.
Should federal income tax rates return to the levels of a decade ago, the average Oklahoma family of four with an annual income of $63,100 would see its tax bill rise by $2,200 next year, the report says. In all, 1.3 million Oklahoma families would have higher federal income tax bills.
Oklahoma consumers would spend an estimated $2.2 billion less next year, and the state's gross domestic product would decline by 1.5 percent, the White House says.
Congressional Republicans and the White House are in a standoff over the expiring tax cuts. President Barack Obama wants to retain the current rates for couples with income under $250,000, while Republicans want to preserve the rates for all taxpayers, including those in the top brackets.
The White House report says 99 percent of Oklahoma families making less than $250,000 would see no income tax increase under the president's plan.
Retaining the tax cuts will require action by Congress. If lawmakers fail to take action to preserve the lower rates, the higher ones will go into effect. That would be on top of higher payroll taxes since the temporary cut in the tax that funds Social Security is also set to expire in January.