An income tax-cutting proposal backed by Gov. Mary Fallin passed easily Tuesday night in the House of Representatives, despite concerns from House Democrats that the state can't afford to reduce revenue.
House Bill 2032 passed mostly along party lines, 65-30. It now goes to the Senate.
HB 2032 would reduce the state's highest personal income tax rate from 5.25 percent to 5 percent.
The Republican governor recommended the proposal last month to the GOP-controlled Legislature after legislation seeking bigger cuts failed to advance last year.
HB 2032 is one of three income tax-cutting measures being considered this year. The Senate earlier this week passed Senate Bill 585, which would lower the top personal income tax rate to 4.75 percent; it would eliminate several tax preferences by 2015, including those for equipment for recycling or waste reduction and for child-care businesses.
The House late Tuesday had yet to consider HB 1598, which would drop the top personal income tax rate from 5.25 percent to 4.99 percent.
Personal income taxes bring in about one-third of the state's legislatively appropriated budget. For this fiscal year, personal income taxes are estimated to bring in $2.1 billion of the $6.8 billion budget.
HB 2032 calls for the income tax cut to be paid for out of available revenue. It is not dependent on reducing or eliminating any tax credits or exemptions or deductions as most of last year's proposals did.
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“It is important that Oklahomans hold on to more of their hard earned tax money. People with more money in their pockets either save, invest or spend those dollars. This is good for the economy and previous income tax cuts have sparked record revenues and prosperous growth here in Oklahoma.”
House Speaker T.W. Shannon,
Author of House Bill 2032