Why Oklahoma Should Keep The State Income Tax
It's a topic that has been in regular conversation in our state capitol for a few years now, but in 2022, the idea of ditching the Oklahoma State Income Tax is hitting legislative desks with support. While it may seem like a good idea that'll give you more money per paycheck, don't forget about the golden rule in life.
Only two things are absolute, death and taxes.
Governments never give up tax revenues. If Oklahoma ends the state income tax, they'll just find new ways to get your money. Just look at how the Lawton City Council always tacks failed ballot measures and bonds onto our water bill after the citizens reject them.
Governor Stitt produced a ten-year plan to end the income tax to ease the burden on all Oklahomans... but if you judge the likelihood of success of the past examples, it'll never work.
"We just need to be more responsible with our tax revenue."
If the Oklahoma legislature has proven one thing in my adulthood, it is they are not responsible with our tax dollars. Twice we have watched teachers walk out and practically strike demanding fair and equivalent pay as our surrounding states, and while the Oklahoma government always comes up with a plan to pay teachers and boost education spending, the plan never goes through.
"Tattoo licensing will provide....."
"The lottery will provide....."
"Gambling will provide....."
"Medical marijuana will provide....." and just as Lawton politicians always promise new roads, state lawmakers always promise to fund education, yet here we are with terrible roads and an equally persistent education budget.
The Oklahoma government has about as good a chance of suddenly being good and transparent with tax revenues as Lawton does. It's not going to happen. Federal, state, and local governments do not know how to do without, and that will not change as both parties are really comfortable with that practice.
Of course, you can already hear the token rabble-rouser going on and on about how "Texas doesn't have a state income tax and they have nice roads and a working economy..." which is about half true.
While the state of Texas won't raid a Texans paycheck, they do make up those tax revenues through regressive means like excise tax, use tax, road tax, sales tax, and property tax.
I actually put in a ton of research and wrote all of this up yesterday, but it was deleted out of the server by some poor unpaid intern in Connecticut at some point throughout last evening... Let me give you the quick TL:DR on the matter.
In Oklahoma, our state government levies a 4.5% sales tax on all goods purchased. In Texas, the sales tax levied on most goods is 6.5%.
Look at excise and use taxes... In Oklahoma, you pay a 3.5% tax on your vehicle purchase. In Texas, you pay 6.5% tax on the exact same vehicle.
The median property tax in Oklahoma is 0.87%, lower than the national average. The lowest property taxes in the state are found in Murray County. The tax rate on your lovely three-bedroom ranch-style home in Sulphur is a staggeringly low 0.41%... On the other hand, if you called Norman home, your property would be taxed at 1.16%.
The median property tax in Texas is 1.69%, higher than the national average of 1.07%, and it varies by county just as it does in Oklahoma. If you lived in the far west Texas town of Gail, your property taxes would be a paltry 0.34%. Obviously, that's the benefit of living in the middle of nowhere... but all the same, if you lived in the hipster village of Muleshoe, all property is taxed at a whopping 2.23%.
The fact that 2.23% is a higher percentage of a lower earners income vs a higher earners income makes that a regressive tax. The same can be said about sales tax, excise tax, use tax, road tax, fuel tax, etc...
Here's the thing about income tax, it's progressive. The more you make, the more you pay based on the tax bracket your paycheck falls in.
That's not some wild socialist idea, it's just how income taxes work... how they've always worked...
About half the population believes if Oklahoma really wanted to ease the tax burden, they would end the regressive flat taxes and only tax us all based on personal income in a progressive bracket system that everyone can live with and afford.
As I never pick a side and always offer the contrasting view, the other half of people think it would be more fair to end the progressive tax in favor of flat and regressive taxes... The belief that we'd each only be taxed on the money they spend.
Either way the legislature leans, taxes are going to rise because nobody is talking about cutting budgets, and the state isn't just going to "make due" with what they have vs collecting everything they can.
Ultimately, it's up to you and I. We should individually contact our state representatives and voice our personal opinions on the matter. There's a reason only 9 states do without an income tax, and half of them are heavily subsidized by the oil and gas industry... meaning you and I pay those taxes with every fillup... Do you think Oklahoma can do the same thing and still maintain that $400million oil & gas tax cut we're so famous for?
Odds are, the moment we end one tax, two more shall take its place.