It likely will take longer than 10 years to eliminate the state's personal income tax, the author of one of two measures proposing to dispose of the tax said Monday.
Economic triggers will be added to two bills that call for reducing the top personal income tax rate next year and gradually phasing out the tax by 2022, said Rep. Leslie Osborn, House author of Senate Bill 1571. The triggers would require the state's economy to increase by a certain percentage for additional cuts to take place in the tax.
“We are absolutely building in triggers,” she said.
Osborn, R-Mustang, said she was working on developing the triggers' percentage rate. The higher the percentage, the longer it will likely take for the personal income tax to be eliminated.
She said the triggers are “a little insurance policy” in the event another recession occurs or state revenues come in under projections.
Proponents of reducing and eliminating the personal income tax have said the lower rate will stimulate the state's economy by attracting businesses and allowing most residents to have more money per paycheck to spend.
Opponents have said cutting the personal income tax too quickly could harm funding for essential state services. Personal income taxes bring in about 30 percent of the money legislators appropriate; that doesn't count nearly $800 million of personal income tax revenue that goes to transportation, education and teacher retirement funds before the tax collections go into the general revenue fund.
A House budget subcommittee on revenue and taxation voted 7-3 Monday to pass SB 1571. It goes to the House of Representatives Appropriation and Budget Committee.
Continue reading this story on the...
MORE FROM NEWSOK
Rep. Leslie Osborn's measures are among four personal income tax-cutting bills being considered by lawmakers. Others are HB 3061, which contains Gov. Mary Fallin's plan, and SB 1623. Both call for economic triggers.