REPUBLICANS usually claim the mantle of the “family friendly” political party through support for traditional values and policies that benefit parents with young children. That reputation may take a hit thanks to the GOP tax-cut plan.
The plan includes both a rate reduction and the loss of some middle-class tax breaks. When it was announced, many questioned if the plan would actually benefit most Oklahoma citizens. An analysis by the Oklahoma Tax Commission shows those concerns were justified. It found nearly half of Oklahoma tax filers will see no benefit, with nearly one in four actually experiencing a tax increase.
The loss of both the personal exemption and deductibility of state income taxes appears likely to hit middle-class families the hardest. Those changes increase taxable income by approximately $6,000 and greater for families with more than one child.
The Oklahoma Policy Institute predicts itemizing families with children and incomes between $70,000 and $100,000 “are likely to fare worst” under the plan. That’s a category that could include a married couple with children where both parents work as teachers. It’s hardly the realm of those living a life of “idle wealth.”
OK Policy’s conclusion is reinforced by other projections. Taking typical middle-class scenarios and applying the proposed tax structure, some have estimated middle-class families with children who itemize could see a tax increase of as much as $200. In most examples, Oklahoma families with two to four children could experience a tax increase of $100 to $200, with the tax hit rising along with the number of children.
Even middle-class families using the standard deduction could see a tax increase, according to projections, although some will come out ahead.