Journal Record: “Oklahoma lawmaker files bill to cut tax”

Today, the Journal Record reports on Senator Holt’s tax cut bill.   Here is the text of the story:

Oklahoma lawmaker files bill to cut tax
by M. Scott Carter
The Journal Record, Dec. 29, 2010

OKLAHOMA CITY, OK — A state senator is calling for another reduction in the state’s income tax.

Following last week’s announcement by state Treasurer Scott Meacham that revenue growth will trigger a decrease in the state income tax rate, Sen. David Holt, R-Oklahoma City, said he has filed a bill to take the rate even lower.

Holt said Senate Bill 70 would lower the state’s income tax rate by one percentage point, at a pace of one-tenth of one percent each year for the next decade.

Holt said the cuts would begin in 2012, after the cut from 5.5 to 5.25 percent is implemented. Once the process was complete, he said, the income tax rate would be 4.25 percent.

“I was very pleased to hear the news Tuesday that the trigger will likely be met, and that the income tax rate will fall to 5.25 percent in 2012. I also think implementation of our last scheduled tax cut creates an urgency to do more,” Holt said in a media statement. “I’m introducing this legislation because I believe we need to send the message that we are not done lowering the income tax rate in Oklahoma. With implementation of the last tax cut imminent, now is the time to do this.”

Holt said his legislation would establish a schedule for further cuts, one-tenth of one percent each year for 10 years.

“My legislation does not preclude an acceleration of these proposed tax cuts in future years, and I would welcome that,” he said. “Ultimately, the goal should be to eliminate the income tax in Oklahoma altogether. But, I think in the meantime, we need to send the message that even in tough budget times, we are not abandoning that goal. I recognize there is uneasiness about our current budget situation, but these proposed cuts are incremental, begin at least two years from now, make a small impact each year, and their passage would immediately continue the steady progress towards a promise Oklahoma Republicans have made for a generation.”

Holt said the tax cut legislation, combined with other pro-business initiatives like tort and workers’ comp reform, would “make a bold statement to the nation that Oklahoma is serious about creating the best climate for business.”

“Right now, we’re not sending that message, as 21 states have lower income tax rates. Returning tax dollars to our citizens will grow the economy, and also act as a check on the growth of government,” he said.

Holt could have a receptive audience for his proposal.

Just before Christmas, Gov. Mary Fallin, House Speaker-elect Kris Steele, and Senate President Pro Tempore-elect Brian Bingman issued a joint statement announcing their continued support for cutting Oklahoma’s income tax.

“Letting Oklahoma families and small businesses keep more of their hard-earned money is the right thing to do and a good way to get our economy moving in the right direction,” Fallin said. “Cutting the income tax rate will make Oklahoma more competitive on a national stage and is a step in the right direction as we work to make our state a better place to do business.”

Steele, echoing Fallin, said tax relief is the most efficient and fair way to spur economic growth.

“Cutting our income tax rate will make Oklahoma a more attractive place to do business and a positive, national role model on economic policy,” he said.

Bingman said the cuts would help stimulate economic growth.

“It is important that we remain committed to tax relief and allow the additional dollars in the private sector to create wealth in Oklahoma,” he said.

The governor and legislative leaders made their announcement after the State Board of Equalization reported that tax collections indicate the certification for next year’s appropriations will be at least 4 percent greater than the current fiscal year, triggering an automatic reduction in the income tax rate under existing law.

Under state law, once the 4-percent growth rate is formally certified at the Board of Equalization’s February meeting, the rate reduction will be scheduled to take effect January 1, 2012. At that time, the state income tax rate will be cut from 5.5 percent to 5.25 percent with an estimated fiscal impact of just $61 million in 2012.

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