Fact Check: How would eliminating Oklahoma’s personal income tax impact residents, state revenue?

Proposal

  • Gov. Stitt has reiterated a call to eventually eliminate the state’s personal income tax, which he calls a “path to zero.” (January 29, 2025)

How eliminating the personal income tax would impact Oklahomans

  • The Institute on Taxation and Economic Policy has estimated how much this would cut taxes for Oklahomans by income level: 

Eliminating Oklahoma’s personal income tax would raise taxes for the poorest Oklahomans and reward the richest 1%

2025 Income Lowest  20% Middle 20% Top 1%
Income Range Start Below $46,300 $683,500
Income Range End $24,700 $79,700 and above
Average Tax Cut (annual) INCREASE taxes by $9* $1,500 $55,295
*Eliminating the income tax would get rid of state tax code components that return money back to low-income residents 
Source: Institute for Taxation and Economic Policy

How much state revenue is lost eliminating the personal income tax 

An alternative to tax cuts  

  • For lawmakers who want to put money back in Oklahomans’ pockets, they should expand tax credits that are already on the books.
  • Modernizing targeted tax credits — such as the Earned Income Tax Credit, Child Tax Credit, and Sales Tax Relief Credit — is the most fiscally responsible way to help working families who need it most.
  • Adjusting tax credits requires only a simple majority vote, which makes them easier to raise or lower during difficult economic times. 

Background

Additional resources 

ABOUT THE AUTHOR

David Hamby has more than 25 years of experience as an award-winning communicator, including overseeing communication programs for Oklahoma higher education institutions and other organizations. Before joining OK Policy, he was director of public relations for Rogers State University where he managed the school’s external communication programs and served as a member of the president’s leadership team. He served in a similar communications role for five years at the University of Tulsa. He also has worked in communications roles at Oklahoma State University and the Fort Smith Chamber of Commerce in Arkansas. He joined OK Policy in October 2019.