An Oklahoma legislative tax proposal would hike taxes for many Oklahomans while giving tax cuts to the state’s wealthiest residents.
State Sen. Patrick Anderson, an Enid Republican, pictured right, has introduced Senate Bill 240, which would, if passed, replace Oklahoma’s current income tax structure with a flat tax of 2.95 percent, a change Anderson claims is “simple” and “fair.”
Anderson also claims that “all taxpayers are treated equally” under his proposed plan.
But the plan would also eliminate income tax deductions, credits and exemptions, and this would result in what the Oklahoma Policy Institute calls a “major tax shift.” According to OK Policy, a Tulsa think tank:
The wealthiest households would receive a tax cut, paid for by significant tax hikes on those already struggling the most to get by. Moderate-income families with children, seniors, veterans, and military personnel would be especially harmed by the loss of tax credits, deductions, and exemptions.
OK Policy estimates that under the plan a married couple with two children with an income of $24,000 annually would face a tax hike of $1,083. All similar families earning $57,000 or less would face tax hikes, according to OK Policy, while families earning $150,000 would receive a tax cut of $1,666.
But Anderson claims, “This flat tax offers tax relief to all Oklahomans, and it has no negative impact on the state budget.”
It’s unclear why Anderson would construe a tax hike for many Oklahomans as “tax relief” or if the proposal would be completely revenue neutral. Anderson, in a short press release, said the Oklahoma Tax Commission has told him the flat tax would be revenue neutral, which might be true, but the proposal hasn’t been thoroughly vetted or discussed by other agencies or outside organizations.
Anderson said the plan, if adopted, “would be a great selling point for businesses that are looking to relocate to our great state.” That claim is arguable at best and just echoes the standard GOP line about taxes that isn't quantifiable.
Essentially, the plan is presented under the guise of “tax relief” but it really only redistributes money to the wealthiest among us while making it more financially difficult for working families. This is typical GOP subterfuge. Let’s hope a majority of Anderson’s constituents see through it and speak up.
It’s uncertain how seriously Anderson’s fellow legislators will consider the bill, which will probably be just one of other tax proposals presented this coming legislative session. Republicans dominate both the Senate and House with large majorities. They failed to pass a tax cut last legislative session, but they have indicated they plan to push again this year for a cut. Gov. Mary Fallin, a Republican, also pushed for an income tax cut last year.
Recent tax cuts in neighboring Kansas have led to severe budget problems, and that state’s dire situation is sure to have an impact on the debate here in Oklahoma. Do we follow the path of Kansas and cut education and social services funding even further to benefit wealthy people?
Anderson has also introduced somewhat controversial and frivolous legislation that would prohibit the state from adopting any recommendations from Agenda 21, a United Nations measure adopted in 1992. I wrote about that here. Anderson’s bill has received widespread media attention for its needless paranoia and its possible collateral consequences.
Meanwhile, most working Americans are facing higher taxes this year because the federal payroll tax cut, implemented two years ago, has now expired. The average worker will pay $700 more a year, according to one estimate.
Anderson’s proposal, along with higher federal taxes, would make it even worse for working families in Oklahoma.
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