The plan to reduce Oklahoma’s income tax from 5.25 percent to 5.00 beginning in 2015 is a done deal. We know it means losing $200 million from state revenues that could have gone to hire more teachers and properly fund public safety so that we have enough troopers on the road and ensure they’re paid a competitive salary.
All along, supporters of income tax reduction plan have talked about the “real” tax relief this bill will bring. According to them, the “average” taxpayer will see a savings of $82 a year—that’s less than a quarter a day. But the Institute on Taxation and Economic Policy has taken it a step further by showing us how that tax reduction impacts Oklahoman’s by breaking down the tax benefit by household incomes. You might want to pay attention to this.
The lowest 20 percent of Oklahoma income earners, who make less than $19,500 annually, will see absolutely no benefit. In the second 20 percent of wage earners, with an annual income of between $19,500 and $36,400, they will see a tax savings of a whopping $9 dollars a year.
The middle 20 percent of Oklahomans, who earn between $36,400 and $58,100, will see about $30 a year. The fourth 20 percent of Oklahomans who make between $58,100 and $97,700 a year will net $81 a year.
The next income group represents 15 percent of households. With an income of between $97,700 and $190,900, the benefit is quite a bit better—a gain of $169. The next four percent, which includes incomes from $190,900 to $433,200 a year, will come out $362 ahead.
The real eye-opener is when you look at the top one percent of Oklahoma households—these have an average income of $433,200 a year or more. They will come out $2,031 ahead because of the tax cut.
Our schools will have no increase in operating funds even though costs are rising. The teachers will receive no raises—neither will our state troopers, our understaffed and underpaid corrections officers, or any of the thousands of dedicated state employees who’ve had no raise in the last six or seven years. In return, 80 percent of Oklahoma tax payers will get to keep pennies a day, if that much. But Oklahomans with the highest 20 percent of earnings will see a net gain of up to $2,031. It’s “real” relief for somebody alright—but it is really shortsighted for our entire state.
Thanks again for reading my “Senate Review.” If you have any questions on a legislative matter, please do not hesitate to contact my Senate office at the Capitol by calling (405) 521-5555 or writing me with your concerns at: Senator Sean Burrage, 2300 North Lincoln Blvd. Rm. 522, State Capitol Building, Oklahoma City, OK 73105. I always enjoy hearing from my constituents and consider it an honor to be your voice in the Oklahoma State Senate. May God bless you.