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