HB 2032 is not dependent on reducing or eliminating any tax credits or exemptions or deductions.
SB 585, by Sen. Mike Mazzei, R-Tulsa, would eliminate more than two dozen tax deductions, including for the sale of national landmarks, employer-provided child care, hepatitis immunizations for employees and for manufacturers of electric motor vehicles.
It also would change or eliminate several individual taxpayer deductions, including a child-care tax credit, which would be limited to those with incomes under $50,000, and the personal exemption. The personal exemption restriction would no longer be allowed for any taxpayer who can claim fewer than four personal exemptions, and for single individuals who earn more than $35,000. The change would save the state nearly $440 million.
Inman said SB 585 is too similar to measures that failed to win approval last year.
“We thought we had litigated this issue last year when they offered up a plan that would actually cut taxes for a few and raise taxes on others,” he said. “That's essentially what the Senate plan does. … We think when that bill comes over to the House it will be difficult to find 51 votes to raise taxes on working families and cut taxes on others.”
Jennifer Monies, senior vice president of communications at The State Chamber, said the business group is backing HB 2302 because it meets its criteria of supporting a gradual reduction of the personal income tax, provided that the tax burden will not be shifted onto business, and that economic development incentives will be protected and core state services will not be underfunded.
“We have concerns with SB 585 by Sen. Mazzei in its current form because the bill limits economic development tax incentives that we believe have successfully created jobs and investment in our state,” Monies said. “Sen. Mazzei has shown a willingness to work with us on these concerns.”
Michael Carnuccio, Oklahoma Council of Public Affairs president, said HB 2032 offers “true tax relief for Oklahoma families and job creators. It helps Oklahoma be competitive in the race among states for jobs and economic growth, particularly as other states work to lower the tax burden on their citizens.”
“While the Senate has been a pro-growth champion in 2013 on workers' comp reform, the tax proposal the Senate passed would increase taxes on many Oklahoma families and would target job creators to pay for a rate reduction that wouldn't even kick in for two years,” Carnuccio said. “This sends the wrong message as we try to make Oklahoma more attractive to employers fleeing high-tax states.”
The group is releasing its idea Monday for a state budget, which will include a plan for a half-percent income tax cut without raising taxes or reducing funding for education, transportation or public safety.
David Blatt, director of the Tulsa-based Oklahoma Policy Institute, which supports funding for state programs that serve low-income Oklahomans, said he likes that SB 585 defers tax cuts until 2015, which would make additional revenue available this year for legislators to fund state agencies. He also likes that the bill keeps tax deductions for low- and moderate-income Oklahomans.
“Overall, it's a pretty reasonable tax reform package,” he said.