Newspaper article THE JOURNAL RECORD

Average Family Saves $114 a Month under Keating Reform Plan

Newspaper article THE JOURNAL RECORD

Average Family Saves $114 a Month under Keating Reform Plan

Article excerpt

The average Oklahoma family making about $31,000 per year would have $114 per month more to spend under a 5.9 percent service tax proposal backed by Gov. Frank Keating, administration officials said Thursday.

"This is a huge tax cut for Oklahoma working people," the governor said.

The savings would come from abolition of Oklahoma's individual income tax, Keating said.

That same family, if it spends $400 per month on groceries, would save another $18 per month under the proposal, which would also remove the 4.5 percent state sales tax on grocery items.

At $40,000 per year in income, Keating said, a family would save about $300 per month, at $75,000 in income, about $400.

"Tax reform is essential for Oklahoma growth," the governor said.

Although they have not lined up in favor of this particular new tax, Keating said that some Democratic legislative leaders see the wisdom in doing away with the state income tax.

Joining Texas and other states that have no income tax would be a much-needed economic boost to add to the recent reduction of workers compensation costs and passage of right to work, he added.

Something must be done, Keating said, to keep more retirees in the state and attract businesses scouting new locations.

"The present system is not working," he said, adding that it does not provide the income and population growth that will be necessary for Oklahoma to regain the member of its congressional delegation lost following the most recent census.

Kicking in at $10,000 for individuals and about $20,000 for a couple, Keating said, Oklahoma's top 7 percent income tax rate ranks 12th highest in the nation, tops in this region.

"That's very high," he said of the income tax threshold.

Keating, who is meeting with newspaper editorial boards touting his tax reform plan, also wants to do away with the corporate franchise tax, which he termed a nuisance tax on business. The levy brings the state about $40 million a year.

Also part of his proposal is to make Oklahoma a pickup state for estate tax purposes.

The entire package would do away with some $2.7 billion in existing taxes, replacing the revenue loss with a 5.9 percent tax on more than 200 services. …

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