Revenue system inflates Oklahoma's sales tax burden

The Oklahoman Editorial Published: February 19, 2013

The state and local tax burden for Oklahomans, using all sources of taxes, ranks 36th. So it's hard to argue that Oklahoma is a high-tax state and that an income tax cut is warranted. However, the income tax cut is partly justified on the basis of competition and the need to attract successful people. People in Texas pay a higher state sales tax rate than Oklahomans, but they pay no state personal income tax. The overall tax burden in Texas is much lower than in Oklahoma.

Efforts to offset income tax cuts in Oklahoma with the elimination of tax credits have gone nowhere and suffered another blow last week with rejection of a credit moratorium/sunset bill. Efforts to restructure the municipal finance system also have gone nowhere. What we have left, then, is chipping away at the margins with incremental, modest reform.

This is what's brought the state's top personal income tax rate down to 5.25 percent and may bring it down to 5 percent by year's end. Other than that, though, don't look for any fundamental changes. Oklahomans will continue to face relatively high state and local sales tax burdens and a relatively low overall burden.

As for local control of tobacco restrictions, that fight has been as tough as restructuring the tax system.

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