Legislative Staff Release
Senator David Holt, an Oklahoma City Republican elected in November, today (Wednesday, December 22) introduced his first piece of legislation, Senate Bill 70, which 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. The tax cutting will begin the year after the currently pending cut from 5.5 to 5.25 percent is implemented. At the conclusion of Holt’s proposed cuts, the 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,” said Holt.
“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.”
Current law states that once state revenues grow four percent year-to-year, a previously approved 0.25 percent tax cut will take effect, lowering the top rate from 5.5 to 5.25 percent. Tuesday, the State Board of Equalization indicated that revenues will trigger the tax cut for 2012. Once that cut is implemented, there are no more tax cuts remaining in statute.
Holt's legislation will establish a schedule for further cuts, one-tenth of one percent each year for ten years, to begin the year following the lowering to 5.25 percent. Holt’s proposed cuts could begin as early as January 1, 2013. The top two tax rates would merge in the third year when the highest rate dips below 5 percent, which is currently where the second-highest rate stands. Holt's bill would ultimately lower the top tax rate, which most Oklahomans pay, to 4.25 percent.
"My legislation does not preclude an acceleration of these proposed tax cuts in future years, and I would welcome that," said Holt. "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.”
Holt continued, “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.”
“With passage of this type of legislation, combined with other pro-business initiatives like tort and workers’ comp reform, we have the opportunity to make a bold statement to the nation that Oklahoma is serious about creating the best climate for business,” continued Holt.
“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.”