The discussion about cutting Oklahoma’s income tax started before the legislative session. Good news for those of us who recognize the punitive nature of our current, progressive system, which places an unfair burden on those who promote prosperity and create jobs. Late this last week, the governor and Legislature agreed upon a tax cut proposal that provides real results for Edmond’s residents. In short, you keep more of what you earn.
Essentially, the plan simplifies the system by reducing the number of income brackets from seven to three, and cuts the top rate from 5.25 percent to 4.8 percent starting in 2013. It provides for a further cut in the top rate to 4.5 percent in 2015 depending on the growth of our state economy. During this process, we held to our commitment to be fiscally responsible by eliminating 33 tax credits, including those for poultry litter transportation and historic landmark sales. We even eliminated the deduction for political contributions, which some politicians use as an incentive when out raising funds.
Next year’s cut means the average Edmond family will pay about 5-10 percent less in their Oklahoma income tax. For example, a family of four making $68,000, will have $200 to $300 more in disposable income. That’s a couple of hundred more bucks in your pocket for you to invest, spend, give to charity, or do whatever you want to with it. It’s your money after all. Further, despite the “chicken little” scare tactics by some critics, our plan ensures full funding for core services, including education, public safety and transportation.
I long have advocated for an overhaul of our state tax structure, so I must admit the proposal is not perfect. Like previous tax cuts, the 2015 reduction is based on triggers. History shows that tax cuts result in growth, not vice versa. The plan also does not outline a clear path to alternatives such as a flat tax or the elimination of the income tax altogether.
Although the plan does not address all outstanding issues, it is a step in the right direction. It’s a step toward a more competitive tax burden in our region and a step toward attracting more business and high-paying jobs. It’s a step toward more efficient government and responsible spending. Over all, it’s a step toward a more prosperous Oklahoma.
REP. RANDY GRAU, R-Edmond, represents House District 81 in Edmond and a portion of Oklahoma City.