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Letter


Eliminate the Personal Income Tax!
An Open Letter to the Oklahoma House of Representatives:

February 17, 2012

Dear Representative:

On behalf of the National Taxpayers Union’s (NTU’s) more than 4,700 members in Oklahoma, I urge you to support House Bill 3038 and eliminate the Sooner State’s personal income tax.

Sponsored by Representative Leslie Osborn, HB 3038 would immediately cut the top marginal rate from 5.25 percent to 2.25 percent. This and other rates would then decrease in regularly scheduled steps each fiscal year until 2022, when the tax rate reaches zero. This is a prudent course, allowing the state ample time to prepare for revenue adjustments and alter state budgets to complement the tax changes.

States with no income tax have routinely outshined those that take money from workers’ paychecks. According to the American Legislative Exchange Council’s Rich States, Poor States: From 1999 to 2009 the nine states with no personal income tax experienced an average growth in gross state product of 61.23 percent - the nine states with the highest personal income tax rates grew by 44.91 percent.

A robust economy is one of the most important factors in fiscal solvency. Because states without income taxes were outpacing their counterparts in expansion of economic activity, they also outpaced them in terms of revenue growth. From 1999-2009, states without income taxes saw a 123.66 percent increase in collections compared to the national average of 70.23 percent. When combined with ongoing expenditure restraint, this kind of strong economic and revenue performance is a recipe for consistently stable and balanced budgets. Eliminating the burden of income taxes in Oklahoma could go a long way toward securing the state’s fiscal future.

Moreover, states compete with one another for business and jobs. Oklahoma leaders know all too well the long-term success of the state’s Red River rival to the south, income tax free Texas. The regional competition could become even tougher as Kansas and Missouri are now seriously considering drawing down or eliminating their income taxes. Kansas is likely to reduce its corporate income tax to zero. Missouri could take an even more aggressive approach by phasing out corporate and personal income taxes over a period of five years.

Oklahoma has a chance to become a regional and national leader on forward-looking tax and economic policy. We urge you to support this important legislation and pledge our maximum effort to help you eliminate the income tax.

Sincerely,

Brent Mead
State Government Affairs Manager