Stephen Ellis, Ph.D., is Associate Professor in the Department of Philosophy at the University of Oklahoma. His research areas include philosophy of economics, decision theory, philosophy of mind and ethics.

The Oklahoma income tax ‘wars’ have gone national!  The latest salvo was fired last week by the Wall Street Journal in an editorial urging Oklahoma to enact major income tax cuts.  While the editorial offers nothing new (except for a high level of snark), it is worth noticing because it reveals the intellectual bankruptcy of the tax-cut case.

In my earlier post on this issue I outlined the trajectory of the debate:

1. Tax cutters think slashing rates would bring prosperity.  They appeal to a theoretical claim (cutting taxes increases incentives) and set of cases (states without income taxes ).  The theoretical claim is likely true, other things equal, so the cases merit looking into.  The Oklahoma Council on Public Affairs (OCPA) sponsored a study by Arduin, Laffer, and Moore Econometrics (ALME) to assess the evidence and it supported tax cuts (ALME’s Stephen Moore  just happens to writes editorials for the Wall Street Journal).
2.  A set of Oklahoma economists looked into the OCPA/ALME analysis and found it seriously flawed.  The particulars of the criticisms are telling.  Kent Olson, Jonathan Wilner, and Cynthia Rogers (disclosure – Prof. Rogers is my wife) all agree that the OCPA/ALME study:

(a) (mis)specifes regression variables in a way that biases results;

(b) uses data in a flawed way;

(c) reports results in a misleading way.

The upshot is that “[n]either the OCPA report nor existing academic research supports the claim that eliminating Oklahoma’s income tax will lead to enhanced growth” (Rogers).

Rogers’ appeal to the broader economic literature is important because the research shows both that the OCPA/ALME report is an outlier and that the observed disconnect between tax rates and performance isn’t a mystery.  As she notes:

“Tax cuts financed by reduced spending on public services … have been linked with negative growth consequences.”  Government expenditures matter – other things equal, poorer public services hurt economic performance.

3. Tax cut advocates have ceded the economic debate.  Instead of addressing arguments, they have spun the discussion as a ‘culture war’ issue or a matter of ‘commonsense’.  The Wall Street Journal tries to do both:

Cynthia Rogers of OU said that the evidence on whether income-tax cuts help the economy is “inconclusive.”  Maybe in the faculty lounge.  But Okahomans can see the jobs bonanza across the border in Texas, which pays its bills with a sales tax.

Populist, anti-intellectual posturing?  Check.  Appeal to ‘good sense’?  Check.  Failure to engage with the substance of the assessment?  Check.

The Wall-Street-Journal approach is seriously harmful.  Intuition and casual observation are good starting points for economic analysis, but they are merely that – places to begin.  To rest satisfied with such weak support when further quality evidence is already available would be deeply irresponsible. State economies are complex systems.  To suppose you can diagnose one with an ‘eyeball test’ is hubris.

On the issues the ‘eyeball test’ fares poorly.  Initially, it contains a false presupposition: Oklahoma is actually doing well, at least as well as Texas.  Even if Texas were doing better, it wouldn’t follow that we should emulate them.  The criticisms of the OCPA/ALME report establish that economic success in no/low income tax states cannot be attributed to tax policy.  Further, even if Texas were aided by its lack of income tax, it wouldn’t follow that Oklahoma would be similarly aided – the criticisms show that complementary attributes/policies are crucial.  (e.g., Alaska has no income tax, but also a combination of small population and large revenues.)

Oklahoma has its own mix of attributes.  To establish another state as a role model, an advocate must demonstrate that it is relevantly similar.  According to the Wall Street Journal, however, Oklahoma policy makers should look at Texas and think they have no income tax and seem to be doing well, so we should immediately follow suit.  That would be like me thinking Kevin Durant makes millions playing basketball, therefore, I should enter the NBA draft and I could make millions, too.  This actually under-rates the danger – my entering the draft would harm few.  A better analogy would be an inventor thinking that Boeing makes good jets, therefore I should build an airliner that looks like a Boeing.  No need to check the engineering because I’m using a successful model.  No one in her right mind would board such a craft, but Oklahoma is on the verge of buying a ticket!

The opinions stated above are not necessarily those of OK Policy, its staff, or its board. This blog is a venue to help promote the discussion of ideas from various points of view and we invite your comments and contributions. To see our guidelines for blog submissions, click here.

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Yesterday, the Governor and legislative leaders announced agreement on a ‘joint proposal for income tax reduction and tax code simplification’. (Click here for a summary and here for HB 3061 which contains the proposal).  Here are some questions and answers addressing the main aspects of the agreement: tax rates, offsets, fiscal impact and triggers. You can see our statement on the plan here.

Question #1: What are the changes in the income tax rates?

Answer: Personal income tax rates will change in two ways. First, the top rate will be lowered from 5.25 percent to 4.85 percent as of January 1, 2013. Second, the number of brackets is reduced. Currently, there are seven tax rates, ranging from 0.5 percent on the first $1,000 of taxable income for a single individual ($2,000 for a married couple) to 5.25 percent on taxable income above $8,700 ($15,000 for married couples) (see the current brackets here). The proposal will reduce this to three brackets: 1 percent on the first $2,500 of taxable income ($5,000 for married); 3.3 percent on income between $2,501 and $7,500 ($5,001 – $15,000 for married), and 4.8 percent on all income above that. If you make over $7,500 in taxable income  ($15,000 for married), you will be in the top income tax bracket, and your income above that amount will be taxed at the top rate.

Q #2: The proposal states it eliminates the existing ‘marriage penalty’. What does that mean?

A: Currently, the income thresholds for some of the lower tax brackets do not match between single individuals and married couples. For example, a married couple making $13,000 and filing a joint return will pay at a slightly higher rate than two single individuals making a combined $13,000. The proposal realigns the brackets so a married couple filing jointly is taxed at the same rate as two single people.

Q #3:  The plan proposes to partly offset the cost of lowering the top rate by doing away with some existing tax preferences. What deductions, exemptions and credits will be affected?

A: There are several -

• Currently, all taxpayers can claim a personal exemption of $1,000 per household member. Under the plan, only taxpayers with adjusted gross income of $35,000 or less for single individuals ($70,000 or less for joint filers) will be able to claim the personal exemption.
• Currently, taxpayers who claim itemized deductions on their federal and state returns are allowed to deduct their state income tax (see our discussion here). Under the plan, this one itemized deduction would no longer be allowed.
• The current state income tax deduction of up to $100 ($200 for married couples) for political contributions would be eliminated.
• Some 30 existing tax credits would be eliminated (see the list). These tend to be narrow credits that are claimed by a small number of businesses and individuals; some are not claimed by anybody. The total fiscal impact of eliminating these credits is estimated to be just over $4 million.

Other tax preferences that were targeted for elimination in earlier proposals – including exemptions for retirees, veterans and military personnel; broad-based credits such as the earned income tax credit, sales tax relief credit, and child/child care tax credit; and the most significant business credits, including those for oil and gas production – were left intact.

Q #4: Will some people end up paying higher taxes under this plan?

A: Yes. While the plan represents an overall tax cut and many taxpayers will pay less, some will pay more. The Oklahoma Tax Commission (OTC) states that 54 percent of taxpayers will pay less tax, 21 percent will have unchanged tax liability, and 25 percent will pay more. Some lower income individuals will pay slightly more due to the changes in the bracket structure. An OTC analysis shows that the average taxpayer with income between $0 – $24,000 will pay more under the plan. Some higher-income taxpayers will lose more as a result of  losing their eligibility for the personal exemption and the deductability of state income taxes than they will gain from the cut in the top rate. Larger families with incomes between $70,000 and $100,000 who itemize their deductions are likely to fare worst.

Q #5: Is this plan revenue-neutral?

A: No. Even with the offsets from eliminating certain tax preferences (see #3), the tax cut is projected to reduce state tax collections by $32.7 million in FY 2013 and by $102.0 million in FY 2014. This will mean less available revenue to be appropriated for state services.

Q #6: What future tax cuts are included in the plan?

A:  In tax year 2015, a trigger would reduce the top income tax rate an additional 0.30 percentage points, from 4.8 to 4.5 percent, if revenues grow by at least 5 percent. Five revenue sources – personal income tax, corporate income tax, sales, use and motor vehicle taxes – would be used to calculate revenue growth.In December 2014 (mid-way through FY 2015), the Board of Equalization will determine if FY 2014 revenues rose by 5 percent from FY 2013; if so, the rate reduction will take effect in January 2015. This could have the effect of reducing revenues for the remaining six months of FY 2015 as well as subsequent years.  The revenue impact of lowering the top rate to 4.5 percent is projected to be an additional $171 million.

Our calculations show that over the past 20 years, annual revenue growth from the five taxes exceeded 5 per cent eleven times.

Q #7: What if the trigger is not activated for 2015?

The proposal states that this is a ‘one-time revenue trigger’; if the trigger does not kick in for 2015, the top rate will remain at 4.8 percent. Of course, there is nothing to prevent the Legislature from revisiting this down the road.

Q8: What happens now?

The legislation will need to be passed by House and Senate conference committee and then be approved by both chambers before session adjourns on Friday, May 25th.

For more on the income tax debate, visit our Tax Reform Information and Take Action pages.

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Yesterday’s Wall Street Journal editorial supporting a proposal by Oklahoma governor Mary Fallin to phase out the state’s income tax contains a slew of incorrect or misleading statements.  For instance:

• The editorial wrongly asserts that states without income taxes have had stronger economic growth than other states, echoing a claim from a recent report from economist Arthur Laffer and the American Legislative Exchange Council.  As we have explained:

A key flaw in the Laffer analysis is that all of its measures of “economic growth” are really just measures of population growth.  As a state’s population grows, you would expect its total number of jobs and its total economic output to grow with it.  But, that’s not the same thing as a state’s per-capita performance.

A study from the Institute on Taxation and Economic Policy shows that residents of states with relatively high income tax rates are doing as well, if not better, than residents of states lacking a personal income tax in terms of per-capita economic output and household income.

• The editorial claims that states with relatively high income tax rates have faced the biggest budget shortfalls.  That’s simply not true.  Four of the nine states without an income tax — Nevada, New Hampshire, Texas, and Washington — have closed (or are closing) above-average shortfalls for the upcoming fiscal year, while some of the high-income-tax states that the editorial mentions, like Illinois and Maryland, had below-average shortfalls.Also, the editorial’s boast that no-income-tax states “manage to balance their budget nearly every year” makes little sense, since all states except Vermont are required to balance their budgets.
• The editorial cites Governor Fallin’s warning that Oklahoma is about to become an “income tax sandwich” as neighboring states consider eliminating their income taxes.  It’s true that anti-tax activists have been promoting income tax repeal in Kansas and Missouri for years.  But they haven’t succeeded.   In fact, Governor Fallin’s proposal would make Oklahoma the only state ever besides oil-rich Alaska to repeal its income tax.

The editorial correctly notes that many of Oklahoma’s leading economists have challenged claims that eliminating the income tax would help the economy.  But it wrongly suggests that non-economists feel differently.  A recent survey found that Oklahomans oppose the tax cut by a 42-35 percent margin, partly because they overwhelmingly view an educated, well-trained workforce as more important than low taxes — and a state that lacks income tax revenue will find it harder to find the resources to educate its own people.

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Revenue growth triggers are the latest gambit in this effort. Under triggers, automatic tax cuts would go into effect whenever revenues increase by a certain percentage. Supporters say that triggers promote fiscal responsibility because they prevent us from cutting taxes during a recession.

The word out of the Capitol is that Governor Fallin is pushing to include triggers in the final proposal that comes out of conference committee. Triggers were part of the Governor’s original plan, and they have been added by the Legislature to two other bills.

We previously discussed why triggers are bad policy in general. An examination of the specific language in these triggers reveals numerous ways that they would not protect us from cutting taxes when we cannot afford it.

For example, the triggers added by the House onto SB 1571 would cut the top rate any time state revenues increased by at least 2.5 percent from year to year. First of all, 2.5 percent is a much too low bar for growth. Inflation over the last year was 3.2 percent, which is fairly typical. Inflation rose above 2.5 percent in six out of the last ten years. In any of these years, 2.5 percent revenue growth would have meant income rose more slowly than expenses. The state would be cutting services even without a tax cut.

Second, a year to year trigger ignores whether the growth was due to a boom economy or merely a partial recovery from a recession. Revenues could drop by 20 percent and never be allowed to recover, because every bit of growth triggers another cut. In fact, that’s exactly what happened in January, when a trigger reduced the top rate from 5.5 percent to 5.25 percent even though revenues remain substantially lower than they were in FY ’08. That trigger took $125 million out of the budget at a time when schools are being forced to lay off teachers. Lawmakers seem to have very short memories.

The triggers added by the Senate to HB 3038 did attempt to respond to this concern,  but in the process they created new problems. The Senate’s trigger is set at a 5 percent increase above fiscal year 2012. By setting the base year at 2012, they avoid the problem of a very low base caused by a recession. However, the “growth” year to year is not adjusted by inflation, and it is also cumulative over multiple years. It’s not hard to imagine a scenario where that triggers a tax cut at a very bad time.

For example, revenues could rise by 1 percent in 2013 and then stay flat for the next 4 years. We already know many expenses will go up over that time due to inflation, rising health care costs, and increased caseloads and enrollment. To cover those expenses, we would be forced to make significant cuts to core services. Yet by the trigger’s definition, that would be enough “growth revenue” to force another tax cut.

If legislators could predict the future of our economy, they should be off making millions on Wall Street. But they cannot predict the future, and they cannot design a formula to fit every possible scenario. That’s why putting our tax system on auto-pilot is a risk we should not take.

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The poll reveals that while voters may support phasing out the income tax in theory, support evaporates when voters are presented with concrete choices and consequences involved in proposals to reduce or eliminate the tax cuts. In particular:

• A plurality of voters (42 percent) oppose decreasing the state income tax and paying for it by eliminating popular tax credits like the child tax credit and the sales tax relief credit, as has been proposed by Governor Fallin and some legislators. Opposition to the proposal increases significantly (rising 28 points to 70% oppose), when voters are informed that the proposal will increase taxes for most families with children and seniors who earn under $50,000 a year while the largest tax cuts will go to the wealthiest five
  percent of Oklahoma households.
• 81 percent  of voters oppose reducing funding for public schools in order to pass on the savings in the form of a tax cut. 80% oppose cutting Oklahoma’s public safety services to provide a tax cut, while 78 percent oppose cutting funding for roads, bridges, and highways. Even among Republicans, over 70 percent of respondents oppose cuts to these these services in favor of tax cuts.
• A strong majority of voters (70 percent) agree that “phasing out the state income tax will lead to higher
  property taxes and sales taxes to provide necessary funding for public services like schools, roads, and public safety. This belief was shared by a large majority of Republicans (59 percent), Independents (69 percent) and Democrats (79 percent) in the survey. When voters are asked whether they support phasing out the state income tax if it meant higher property taxes and sales taxes, opposition to an income tax phase-out rises to 67 percent.

In a release accompanying the result, Toby Friesen, Director of the Oklahoma Advocacy Project, stated:

The poll shows that Oklahomans understand there is no free lunch. They recognize that tax cuts will lead to even more challenges for our already over-burdened schools, public safety officers, and road networks. And they clearly understand that services have to be paid for somehow. If we do away with the income tax, we will end up with higher property taxes, like in Texas and other no-income tax states, or we will add to our already high sales taxes.

The poll also found voters strongly convinced that education and workforce training is seen as a greater priority for Oklahoma’s prosperity than income tax reductions. When asked to choose between the two, Oklahoma voters believe that the best way to attract businesses to locate and invest in Oklahoma is with an “educated and well trained workforce” (70 percent ) – much more so than “low personal income tax rates” (21 percent).

The poll was conducted by Global Strategy Group, a leading national public opinion firm whose clients include elected officials across the country, major non-profit institutions, and Fortune 500 companies. They surveyed 603 registered voters in Oklahoma between May 3-6. The margin of error in the poll is +/- 4.0%. The Oklahoma Advocacy Project is a non-profit that was formed to advocate on behalf of working Oklahomans. The organization supports reasonable policies that create economic prosperity for all Oklahomans and that protect core government services.

Click here for the Global Strategies memo on the tax cuts, which includes their topline survey results, the Oklahoma Advocacy project press release, and a set of graphs displaying key findings. You can find comprehensive information and materials on the tax debate at our Tax Reform Information page and find out how you can make your voice heard in this debate on our Take Action page.

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Even so, a significant danger remains that we will find another way to cripple our state’s finances. Some legislators are pushing an automatic trigger that would ratchet down the income tax any time state revenue grows by a certain percentage.

Governor Fallin’s plan included a tax cut trigger whenever revenues increased by 5 percent or more from year to year. Triggers have recently been incorporated into two other bills: a House committee added a trigger into SB 1571 that cuts the top rate another quarter of a percentage point whenever state revenue grows by 2.5 percent over the previous year. A Senate committee put a trigger into HB 3038 that cuts taxes whenever revenue from non-income tax sources reaches 5 percent above FY 2014. The trigger’s definition of “growth revenue” is cumulative year to year, so if revenue rose 1 percent following the tax cut and then stayed flat for the next 4 years, the trigger would go into effect. All of these bills would use triggers to eventually eliminate the income tax entirely.

Proponents of triggers may try to sell this as a “responsible” way to cut taxes, but it’s the opposite. It’s an attempt to avoid responsibility by putting the tax system on auto-pilot. The result could be a wreck that everyone can foresee but no one can prevent.

Tax cut triggers are bad policy for three main reasons:

1) Triggers would prevent us from climbing out of budget holes. Revenues could drop 20 percent in a recession but never be allowed to recover, since every 2.5 or 5 percent gain would trigger an automatic tax cut. We don’t need to look far to find an example. The cut that went into effect this year was triggered by growth that was only a partial recovery from the worst revenue collapse in decades. That’s why former State Treasurer Scott Meacham said instituting this trigger was one of the things that he was least proud of doing during his time in office.

2) Year to year revenue growth is not “extra money.” As the economy grows, Oklahoma will have to deal with inflation, a larger population, and more infrastructure to maintain. That brings in more revenue, but it also means higher costs for the state. We also know that our needs will increase in several areas. We have an aging population that will require more public supports while contributing less productivity to the economy. We have deteriorating transportation and water infrastructure that will bring escalating repair bills. We have pension obligations that are still inadequately funded. All of these factors will make it more expensive just to maintain core services at their current levels. A ratcheting down of tax rates implies that we can grow out of the need for public services. That’s like saying we’ve grown out of our clothes, so we don’t need to buy new ones.

3) The trigger sets the wrong priority for Oklahoma. Our state has a dire need for investment in numerous areas. We must improve student achievement to meet increasingly strict testing requirements. We must fix a child welfare system that is putting kids in danger. We must treat an epidemic of mental health and substance abuse problems that is threatening to overwhelm the criminal justice system. We must improve our college graduation rate to ensure a skilled workforce that can build our future prosperity. And those are only the issues we know about. We can’t predict every problem the state may face in the next couple decades. Yet a trigger would shove tax cuts to the front of the line, regardless of our needs and responsibilities.

Deciding tomorrow’s tax cuts today would tie the hands of future legislators, make them less accountable, and limit their ability to make the best decisions based on the circumstances that they face. Lawmakers shouldn’t use triggers to sneak in bad policy through the back door.

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You can also watch video of the full forum, download the speakers’ PowerPoint presentations, and find supporting materials from the Economist Forum page. For all of our fact sheets, issue briefs, news coverage and other materials from the income tax debate, please go to the tax reform information page.

View other clips from OKPolicy’s Watch This video series:

• Fighting Hunger, Feeding Hope
• The Economy Bowl
• What is an IDA?
• Elderly parole
• Long term unemployment, 1967-2011
• Packed Oklahoma prisons, rising costs

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Ken Fergesen, a resident of Altus, is Chairman of NBC Oklahoma, and is active in banking, farming, civic, social and cultural organizations.. He is a past President of the State Chamber of Commerce.

I am really concerned about our State.  The drum beat at 23^rd and Lincoln to eliminate Oklahoma’s income tax has me worried on many levels.  I’m afraid that I haven’t paid as close attention to the arguments until a representative from Oklahoma Council of Public Affairs spoke at the Altus Rotary meeting the other day.  That was when I realized that the proponents of eliminating the income tax were really single-purposed: ‘it’s all about business.’

I am also very pro-business and want our Oklahoma to have a healthy business climate.  I saw former Oklahoma Congressman Dave McCurdy recently and it reminded me of going with him to California and recruiting businesses to expand or move to Oklahoma, and preferably to his district.  When we called on CEOs of Fortune 500 companies, their first questions were about quality of life, not about tax rates.  They were concerned about educational and cultural opportunities for their employees.  Of course it is important to have a competitive business environment, and we do.  Oklahoma has a very favorable tax burden, tax incentives and cost of doing business, and a low cost of living for its citizens.

When I chaired the Oklahoma State Chamber, I traveled all across Oklahoma and visited many of its towns in every county.  I couldn’t help but notice communities that have flourishing arts and cultural activities were on the move, business was being done and cash registers were ringing.  At the time those observations were purely anecdotal, but now there are economic impact studies that prove my observations.

I now chair an organization, Americans for the Arts, that completes an arts impact study every three years.  In their latest study the results of the non-profit arts and culture ventures are 5.7 million employees, $12.6 billion in federal taxes, $17 billion in state and local taxes, and $166.7 billion in total economic impact.  Just in Oklahoma there are 7,669 creative industries with 24,490 employees.

All of this is at risk without a little help from our State, and the only way the State can help is by taxing it citizens.  I believe that we want to be the best that we can be, that we want to have the highest quality of life that will help us to be the place where we can enjoy the fruits of our labor.

The opinions stated above are not necessarily those of OK Policy, its staff, or its board. This blog is a venue to help promote the discussion of ideas from various points of view and we invite your comments and contributions. To see our guidelines for blog submissions, click here.

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The Governor of Oklahoma and policymakers in Kansas, Missouri, and other states have proposed income tax cuts that they say will boost economic growth. To make their case, they have cited the example of Texas, which has no income tax and where growth has been strong.

But in reality, Texas is not a helpful model for economic growth for the rest of the country. True, the number of people and jobs in Texas has been expanding. But, as we discuss in our recent paper, much of Texas’ growth results not from its policies but rather from factors that state officials cannot control and that other states cannot emulate.

• Texas has unique geographic and demographic characteristics that have helped lift its economy in recent years. Its border location brings trade opportunities and encourages immigration that, together, help fuel population and job growth.
• A combination of available land and lending regulations have kept housing prices comparatively low and helped Texas avoid the real estate depression that dragged down many other state economies.
• Though Texas’ economy has diversified in recent decades, the state’s abundant oil and gas resources remain a valuable asset — especially when prices for those commodities are high — that most other states lack.

And not everything is rosy in Texas. For instance, Texas has lots of low-wage jobs and lots of poverty. In 2011, close to one in ten Texas hourly-wage workers were paid at or below the minimum wage — well above the U.S. average of six percent. One-quarter of people in Texas lack health insurance — well above the national average of 16.3 percent. And, in part because wages are low, a large share of Texans are poor. In 2010, 18.4 percent of Texas families lived in poverty. Some 15.7 million children (22 percent) of Texas children lived in poverty.

Even if it were possible for other states to replicate these features, the fact that so many Texans have not benefited from the state’s economic growth makes Texas a dubious model for the nation.

The opinions stated above are not necessarily those of OK Policy, its staff, or its board. This blog is a venue to help promote the discussion of ideas from various points of view and we invite your comments and contributions. To see our guidelines for blog submissions, click here.

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Photo by Martha Soukup used under a Creative Commons license.

States without an income tax rely on other taxes to fund government. Far from discovering magical, revenue boosting powers by not having an income tax, these states simply charge higher sales and property taxes.

A new report from the Center on Budget and Policy Priorities shows how much higher:

• In fiscal year 2009, the nine states without an income tax had property taxes that were, on average, 12 percent higher per capita and 8 percent higher as a share of personal income than the national average.
• Sales taxes in those nine states were 21 percent higher per capita and 18 percent higher as a share of personal income than the national average.

The property tax comparison is especially relevant for Oklahoma, since our income tax helps us to keep property taxes very low. In every state without an income tax, people pay much higher property taxes compared to Oklahoma. The average per capita property tax in no-income tax states is more than two-and-a-half times what we pay here.

Oklahoma lawmakers may promise that they would never raise these other taxes, but if the income tax is slashed, the intense pressure to maintain schools, roads, and other vital services, as well pay our debts, would likely force their hand. Or they will pass the buck to local governments who will then to have raise taxes.

As the CBPP report explains:

Higher sales and property taxes can occur in at least two ways.  The state legislature, faced with the need to fund schools, health care and other services and without the income tax revenue, may increase sales taxes or property taxes (as well as other revenue sources such as fees or excise taxes).  Or, the legislature may reduce funding to local governments and school districts or shift spending obligations to localities, which in turn may raise taxes.

The most likely outcome from eliminating the income tax is a combination of tax increases and additional cuts to core services like education and transportation. That means more taxes are shifted onto middle- and lower-income families, since sales and property taxes take the largest share of income from those least able to afford it.

Ultimately, the average Oklahoman would pay more and get less. Far from helping our economy, slashing the income tax would make it even more difficult for hard-working Oklahomans to get by.

For more on the income tax debate, see our tax reform information page.

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