Proposed State Tax Reform Would Increase Federal Taxes

By Pitts, William | THE JOURNAL RECORD, March 18, 2002 | Go to article overview
Save to active project

Proposed State Tax Reform Would Increase Federal Taxes


Pitts, William, THE JOURNAL RECORD


It may come as a surprise to many Oklahomans, but they could wind up paying more taxes under Gov. Frank Keating's tax reform plan, only it would be to the federal government. It may be revenue- neutral for the state, but it wouldn't be for many state taxpayers.

The least publicized fact about the governor's plan is that Oklahomans would be paying the same amount of state taxes, while paying millions more in federal income taxes each year.

The reason is simple. Oklahoma's income tax produces about $2 billion annually, which is a deductible amount on federal income taxes of many Oklahomans. Increased sales taxes on goods and services, also paid by Oklahoma consumer tax payers, to make up this loss to the state treasury are not deductible for the federal tax.

Somehow this seemed to have escaped much mention in the early bloom for doing away with the state income tax and substituting new taxes for it. The question is, was it just overlooked, or merely carefully ignored?

According to one source the Oklahoma Tax Commission did a study for the 32-member citizen/legislator task force on tax reform. It determined Oklahomans would pay $320 million dollars more annually in federal income taxes under the Keating plan.

Some may argue this is a reason not to cut the state income tax rate, but if it is reduced without offsetting tax increases the taxpayer obviously still benefits. That definitely is not an option for the task force or the Legislature at this time.

While the governor's plan has met stiff opposition in the business community and the Legislature, to a lesser degree the same facts would apply under other plans being considered.

Rep. Clay Pope, D-Loyal, chairman of the House Revenue and Taxation Committee, proposed a plan to set the income tax rate at 5 percent and increase the current state sales tax to 6.9 percent.

Senators on the task force reportedly have come up with a plan to reduce the income tax rate from 7 to 5 percent and levy a sales tax on the same services Texas taxes, but exclude rent and financial services.

In a few weeks, the voters should have some inkling of which if any of these plans is to be submitted to them. The task force is scheduled to make its report by April 12.

It was appointed by House and Senate Democrat leaders, the governor and Republican legislative leaders.

Democrat legislators on the task force include Sen. Cal Hobson, D-Lexington, Senate president pro tempore designate, and Sen. Angela Monson, D- OKC, chair of the Senate Finance Committee; Pope and Rep. Debbie Blackburn-D-OKC.

Republican legislators include Sen. Mike Johnson, R-Kingfisher, Sen. Jim Williamson, R-Tulsa, Rep. Todd Hiett, R- Kellyville, and Rep. Forest Claunch, R-Midwest City.

Citizen members of the task force are a diverse group. They include businessmen, tax attorneys, CPAs, an economist, representatives of business groups, education and local government officials, and former legislators.

Co-chairing the group is Don Davis, Lawton, a former Democrat legislator who now serves as president of Cameron University, selected by Senate President Pro Tempore Stratton Taylor, D-Claremore, and House Speaker Larry Adair, D-Stilwell. Howard Barnett, the governor's chief of staff, is the other co- chair.

Many of the citizens and legislators on the task force previously expressed the belief that tax reform is desirable, but there are differences among its membership over what should be done.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited article

Proposed State Tax Reform Would Increase Federal Taxes
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?