STATEMENT: Troubling new details on Governor Fallin's tax plan

by | February 29th, 2012 | Posted in Blog, Taxes | Comments (3)
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Oklahoma Policy Institute Director David Blatt released a statement in response to Governor Fallin’s tax plan, which will be heard in a House committee for the first time this afternoon:

As details emerge about Governor Fallin’s plan, more problems are coming to light. The plan creates huge “tax cliffs” by doing away with marginal rates and taxing all income at the same rate. When a taxpayer moves between brackets, earning one more dollar of income would make taxes owed increase by as much as $875. Fixing this flaw would increase the cost of the Governor’s plan from $340 million to more than $1 billion in the first full year. Even at $340 million, the plan would blow a hole in the budget as we are trying to restore funding after three years of deep cuts.

We also now know that in addition to eliminating important broad-based tax credits that aid families with children, such as the child tax credit and earned income tax credit, the Governor’s plan does away with numerous important deductions, including those for retirement income, Social Security income, and pay to military personnel who have been captured or killed in action. This means that many families with children, seniors, veterans, and persons with disabilities would see a tax increase under the Governor’s plan

We are encouraged that Speaker Steele and Pro Tem Bingman seem committed to making sure that any tax plan is revenue neutral. We also hope that whatever tax reform proposal emerges does not shift taxes onto struggling Oklahomans in order to fund further cuts to the top income tax rate.

OK Policy has prepared a side by side summary comparison of major tax cut proposals that is available here. For all of OK Policy’s information and resources related to the tax debate, see our tax reform information page.

3 Responses to “STATEMENT: Troubling new details on Governor Fallin's tax plan”

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