Oklahoma legislator: State could use additional tax relief

Published: February 5, 2014

Late last year, the Oklahoma Supreme Court threw out a modest reduction in Oklahoma’s penalty on work — our personal income tax rate – for violating the state constitution’s single-subject rule. While any tax relief is a blessing for many Oklahoma families, the court’s actions may present an opportunity to increase the level of relief — giving state lawmakers a chance to provide a more robust tax-relief plan to help Oklahoma’s economy continue to grow, attracting jobs and prosperity.

For generations, Oklahoma has been losing job creators and job seekers to a more welcoming environment south of the Red River. From 1992-2010, Oklahoma lost nearly $1 billion in working wealth to Texas, as people pursued better opportunities there. Tens of thousands of hardworking individuals, business owners, employers, and, yes, taxpayers, left Oklahoma to put down roots farther south.

Why? One reason is that Texas has no penalty on work, no income tax. Even with higher property taxes, Texas still offers a lower overall tax burden than in Oklahoma. Simply put, Texans get to keep more of their hard-earned money. No wonder many of Oklahoma’s best and brightest migrate to Dallas and Houston.

But now, the drain may worsen. In the past two years, Kansas has dramatically reduced its penalty on work, dropping its top income tax rate below Oklahoma’s. And Kansas’ rate is scheduled to fall further — eventually to zero.

In addition, Kansas eliminated income taxes on small-business profits. Already, the Sunflower State is attracting job creators from across state lines.

Dynamic steps by Kansas, combined with constant pressure from no-income-tax Texas, have situated Oklahoma in an awkward income-tax sandwich. To stay competitive regionally — and nationally, and globally — it’s imperative we continue reducing Oklahoma’s penalty on work.

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Dynamic steps by Kansas, combined with constant pressure from no-income-tax Texas, have situated Oklahoma in an awkward income-tax sandwich. To stay competitive regionally — and nationally, and globally — it’s imperative we continue reducing Oklahoma’s penalty on work.

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