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(The Center Square) – Democrats said an income tax reduction bill passed by the House of Representatives could put the state in future financial jeopardy.
House Bill 2285 would require Oklahomans to pay a flat income tax rate of 4.5%. The bill would gradually decrease the rate by .25% every year the state reaches certain income goals, according to the bill’s summary.
The bill also increases the standard deduction for taxpayers. The change is not a flat tax, as flat taxes do not allow for exemptions and deductions, according to Rep. Mark Lepak, R-Claremore.
More than $56 million would be returned to taxpayers in fiscal year 2024 if the bill passes. That amount increases to more than $142 million in fiscal year 2025, according to the bill’s fiscal note. Those numbers could change as the bill is amended in the Senate, Lepak said.
Democrats challenged the bill, saying it could lead to deficits in state revenue.
“You cannot expect to pass bills costing over a billion dollars and cut taxes at the same time,” said House Democratic Leader Cyndi Munson, D-Oklahoma City. “It’s simple math. If you increase your expenses and decrease your income, you will have a revenue failure.”
Democrat Whip Rep. Mickey Dollens, D-Oklahoma City, questioned the fairness of the tax on the House floor.
“By eliminating our graduated income tax structure, the legislature would be conferring a tax advantage to the wealthy and setting the state up for another revenue failure,” Dollens said. “We need to invest in Oklahomans, not take away state resources. We should redirect our focus to proven ways that help people reach their full potential: ensuring quality health care, a strong public school system, and improved economic diversification.”
House Bill 2285 is one of several tax relief measures under consideration by the Oklahoma Legislature but is the first to make it out of the House.
A bill that would decrease the personal income tax rates for all tax brackets by .25% beginning next year was given a do pass recommendation by the Appropriations and Budget Committee but has not made it to the full House. Under House Bill 1953, an estimated $92.2 million would remain in taxpayers’ hands in 2024.
House Bill 1954 would reduce the personal income tax rate by one-half of a percentage point for all tax brackets beginning in 2024. If the bill passes, taxpayers would see more than $182 million in relief in 2024. House Bill 1954 was also given a do pass recommendation from the Appropriations and Budget Committee.
Lawmakers are also considering eliminating the state’s grocery tax.
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This article First appeared in the center square
