A bill to cut the state’s top individual income tax rate by 0.25 percent and the corporate income tax rate by 1 percent was approved Tuesday by the state Senate Finance Committee.
The vote was 8-2.
House Bill 2508 previously was approved by the state House and will now go to the full Senate for consideration.
An alternative tax cut bill, Senate Bill 1246, passed the state Senate earlier and is awaiting action in the House. Ultimately, senators and House members are expected to try to work out differences in a conference committee.
Both proposals contain triggers designed to keep the tax cuts from going into effect until state revenues improve. The earliest taxpayers would see a reduction under either tax cut plan is 2016.
State Sen. Mike Mazzei, R-Tulsa, compared the financial impacts on the state of the competing tax cut measures Tuesday.
The House plan that calls for cutting the state’s top individual income tax cut rate from 5.25 percent to 5 percent and the state’s corporate income tax rate from 6 percent to 5 percent would cost the state $83.6 million in 2016 if the triggers are reached and $200 million once fully implemented, Mazzei told committee members.
The Senate plan does not include a corporate income tax cut, but calls for an initial 0.25 percent cut in the state’s top income tax rate, followed by a subsequent 0.15 percent cut if revenue growth is sufficient. It would cost the state $57 million in 2016 if the trigger is reached and $146.9 million a year once it is fully implemented, he said.
Those fiscal impact figures don’t take into consideration the potential increase in tax revenues due to improvements in the economy attributable to the tax cuts, Mazzei said.
State Sen. James Halligan, R-Stillwater, debated against House Bill 2508 in committee Tuesday, saying he didn’t want to impose burdens on future legislatures.
“We certainly are having challenges this year, so I think we should be prudent and not embrace this recommended tax cut,” he said.