![]() Almost two-thirds of the tax cut – 61 percent – would go to the wealthiest 20 percent of Oklahomans. If Oklahoma were to adopt the changes as laid out in HB 2285 – adopting a 4.5 percent flat tax and increasing the standard deduction – the changes would have a skewed and unfair impact. Indeed, the slightly graduated nature of the current tax is the only aspect of our current tax system that offsets the regressivity of the state’s high reliance on sales tax. While a more graduated tax would be better for low- and middle-income residents, Oklahoma’s somewhat graduated nature of the current tax keeps the lowest-income Oklahomans from paying more. ![]() ![]() Currently, Oklahoma’s income tax is slightly graduated, meaning that an individual’s tax rate slightly increases with their income, with the full tax rate of 4.75 percent kicking in at $7,200 of taxable income. A flat income tax will make the tax system more unfairįlat taxes – which subject all taxable income to the same tax rate – mean low- and middle-income families pay a larger share of their income in total taxes than wealthy families do. Making these changes to the personal income tax would make Oklahoma’s tax system less fair, less adequate, and less stable than it already is. While that specific bill was not heard in the Senate, the concept could easily resurface in the final budget package. This idea was proposed in House Bill 2285. ![]() Though they have not yet been introduced, this year’s budget package might include several ill-advised tax changes, such as the creation of private school vouchers via a tax credit.Īnother troubling proposal is a significant change to the personal income tax that would include restructuring it as a flat income tax and adding certain triggers that would automatically cut taxes further in the future. Bills that would change tax policy are typically unveiled as part of the budget package. With less than two weeks left in the 2023 legislative session, lawmakers have very little time remaining to reach agreement on, reveal, and adopt the Fiscal Year 2024 state budget. Current Tax Cut Proposals Don’t Help Most Oklahomans. ![]()
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