Tax reform could be coming soon for the Sooner State.
In his State of the State speech today, Oklahoma Governor Kevin Stitt announced his support for a bold income tax reduction plan, as well as eliminating the sales tax on groceries.
The governor urged legislators to work with him to modernize the state tax code, and announced, “My vision is to create a Taxpayer Protection Plan that responsibly lowers income taxes according to our state revenue.”
Stitt added, “Cutting taxes based on how our economy grows ensures we’ll always have money to pay for core services like education and roads and bridges. And as our economy grows, Oklahomans share in our success by keeping more of their hard-earned money.”
The governor is referring to the proven policy of using revenue triggers to reduce, flatten, and eliminate the state income tax. States like North Carolina and Arizona have tied tax reductions to revenue benchmarks in order to reduce income taxes without expanding other taxes in a harmful way, or running into surprise budget gaps.
Governor Stitt also noted the many other states that are cutting taxes, saying, “we can’t be left behind.” Last year 14 states cut taxes, and New Hampshire set a path to become the 9th state with no income tax whatsoever.
One of those states was Oklahoma, the state trimmed personal income taxes, by .25%, and dropped the corporate income tax by 2%… but Governor Stitt is not done reducing burdens on Oklahoma families and businesses.
States with no income taxes have seen rapid growth, while high tax states have watched taxpayers flee to the exits. New York, and California lost more than 1% of their populations in 2021, while Florida, Arizona, Idaho, Texas, and others grew by more than 1%.
Governor Stitt noted 27,000 new residents made Oklahoma home last year, and tax cuts are a great way to attract more taxpayers to the state.
With Republicans in control of both chambers of the legislature, and Governor Stitt’s backing for a bold plan, reform that puts Oklahoma on a path to phasing out the income tax should be on the table.
The governor also backed a major school choice bill, the Oklahoma Empowerment Act, sponsored by Senate President Pro Tempore Greg Treat. The bill takes state school funding and devotes it to individual students, so they and their families can decide whether it makes sense to attend their local public school, charters, or private options. Stitt said, “it makes sure that money follows the student, and it would make us a national leader in school choice.”
The Sooner State has seen key wins on tax policy, occupational licensing reform and regulation, and improving the criminal justice system under Governor Stitt, with bold income tax reform, the best could be yet to come.