Dear Senator:
Onbehalf of the National Taxpayers Union’s (NTU’s) more than 4,700 members inOklahoma, I urge you to support Senate Bill 1571 and eliminate the SoonerState’s personal income tax.
Sponsored by SenatorClark Jolley, SB 1571 would phase out the state personal income tax over 10years, dropping the top marginal rate from 5.25 percent to 2.25 percent in thefirst year. Scheduled annual decreases would take place until 2022, when thetax rate reaches zero. SB 1571 improves upon similar House legislation, HB 3038,by immediately eliminating the income tax for filers in the lowest tax bracket($8,700 for individuals, $15,900 for married couples). NTU fully supports bothefforts, as they put Oklahoma on the path to the same desirable destination: azero income tax rate.
When it comes totax policy, SB 1571 would establish a much more hospitable environment for long-termgrowth. A simple comparison between those states with no income tax and thosewith high income tax rates shows a stark contrast. According to the AmericanLegislative Exchange Council, from 2001-2010, the nine states with nobroad-based income tax saw average population growth of 13.7 percent, an increasein state gross product of 58.5 percent, and a 5.4 percent employment gain. Stateswith the nine highest income tax rates experienced a rise in population of 5.5percent, state gross product growth of 42.1 percent, and a 1.7 percent decline in employment. The upshot is notdifficult to understand: individuals and businesses vote with their feet andthey will go to the states that offer the best opportunities.
A second, somewhatless intuitive point is that states without income taxes have outpaced the restof the pack not only in economic growth, but in revenue growth as well. From1999-2009, states without income taxes saw a 123.66 percent increase incollections compared to the national average of 70.23 percent. When combinedwith ongoing expenditure restraint, this kind of strong economic and revenue performanceis a recipe for consistently stable and balanced budgets. Eliminating theburden of income taxes in Oklahoma could go a long way toward securing thestate’s fiscal future.
Oklahoma leadersknow all too well the long-run success of the state’s Red River rival, incometax-free Texas. The regional competition could soon become much tougher. Kansasis likely to reduce its corporate income tax to zero. Missouri could take aneven more aggressive approach by phasing out corporate and personal incometaxes over a period of five years.
Oklahomahas a chance to become a regional and national leader on forward-looking taxand economic policy. We urge you to support this important legislation andpledge our maximum effort to help you eliminate the income tax.
Sincerely,
Brent MeadState Government Affairs Manager