New data, old story: Our Online Budget Guide on Oklahoma’s low tax levels

Last year we published OK Policy’s (and possibly the nation’s) first Online Budget Guide, a primer for Oklahoma state and local government finance. We were pretty excited about the online approach. It allowed us to save paper and printing and distribution costs, add new material as it made sense, and update as new data became available. We’re still excited, in part because we have new data. We’re currently updating our comparison of Oklahoma taxes with those paid by other Americans. The numbers have changed, but the story is the same: Oklahoma has among the lowest taxes in the nation.

Overall, the average Oklahoman pays $992 less in state and local taxes than the average American. The gap has grown from $854 in two years. The difference is mostly in the individual income tax, where phased reductions have lowered taxed for almost all Oklahomans, while cutting the state’s budget by over $750 million a year. As the graph indicates, Oklahomans pay less of every type of tax, except “Other,” which includes gross production taxes on oil and gas, a revenue source not available to most states. The difference is particularly dramatic for the property tax; Oklahomans pay less than half the national average. Oklahomans may very close to the national average in general sales taxes.

According to the Center on Budget and Policy Priorities, which analyzed data from the U.S. Census Bureau, Oklahoma ranked 40th among the states in 2008, both in taxes per person and in taxes as a share of income. As the Guide shows, we rank in the bottom half of the states for every tax except the sales tax (22nd) and other taxes (7th, for reasons discussed above).

The Guide indicates that government in Oklahoma is affordable. But the more important question is this: Can we afford cheap government? The Expenditures section of the Guide shows how Oklahoma compares in accomplishments. This year-old data does not tell a story of success. Mostly it’s a story of people doing too little to support the public structures that make society work effectively. We’ll be updating the rankings and grades in this section shortly as well. If our rankings got better in the last year or two, while our taxes got lower, then we’ll have something to be proud of. We’ll also be very surprised. If, as we expect, Oklahoma continues to lag behind almost every state in health, education, infrastructure, and public safety, we’d like to think we’ll start questioning the current wisdom that lower taxes are always the appropriate goal.


Paul Shinn

Paul Shinn served as Budget and Tax Senior Policy Analyst with OK Policy from May 2019 until December 2021. Before joining OK Policy, Shinn held budget and finance positions for the Oklahoma House of Representatives, the Department of Human Services, the cities of Oklahoma City and Del City and several local governments in his native Oregon. He also taught political science and public administration at the University of Oklahoma, University of Central Oklahoma, and California State University Stanislaus. While with the Government Finance Officers Association, Paul worked on consulting and research projects for the U.S. Environmental Protection Agency, the U.S. Department of Transportation, and several state agencies and local governments. He also served as policy analyst for CAP Tulsa. He holds a Ph.D. in Political Science from University of Oklahoma and degrees from the University of Oregon and the University of Maryland College Park. He lives in Oklahoma City with his wife Carmelita.

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