In 1986, President Ronald Reagan transformed the U.S. tax code by eliminating loopholes and lowering taxes for all taxpayers. In doing so, he fueled a wave of economic growth and job creation. In 2013, Oklahoma Senate Republicans are trying to do the same here.
We have three primary goals for tax reform:
Reduce rates for hard-working Oklahomans.
Increase economic activity and job growth.
Responsibly fund core services like education.
When Reagan reformed the tax code, some individuals and entities did pay more because he was willing to tackle exemptions. Real-world experience shows quite clearly that tax policy is best when rates are low and exemptions are few. It is under these conditions that economies and job growth have always thrived.
By lowering the top state personal income tax rate to 4.75 percent, Senate Bill 585 would save taxpayers approximately $119 million in 2015 and $132 million in 2016. Under our proposal, 90 percent of Oklahoma taxpayers would see a tax cut or no change at all in the taxes they already pay.
Should Oklahoma taxpayers be forced to pay higher taxes because of the political handouts and gimmicks forced into our tax code over the past 50 years? These exemptions may have sounded good when they were introduced, but they've diluted our tax base and forced us to pay higher rates, which are a disincentive to growth.
For example, when we layer our tax code with credits and personal exemptions that save taxpayers just $50 yearly, those same taxpayers suffer from lost income and jobs due to higher overall tax rates. By limiting eligibility for credits and exemptions to families with lower incomes and more children, we can ensure they don't get hit with higher taxes. As a result, our plan will decrease taxes for Oklahomans by an average of $153.