After debate, Oklahoma state Senate passes income tax phase out, 30-17
Published: March 12th, 2012
The Oklahoma state Senate today (Monday, March 12) approved Senate Bill 1571, a proposal to phase out the state income tax entirely over a 10-year period. The measure coincides in most respects with the plan developed by Professor Arthur Laffer for the Oklahoma Council of Public Affairs.
The measure provoked a lengthy time of questions and then debate (more than two hours in all) in the upper chamber.
As Sen. Anthony Sykes, a Moore Republican, presided, Sens. Tom Ivester of Elk City and Tom Adelson of Tulsa, both Democrats, peppered Jolley with frequent questions.
Adelson fully rejected the assumptions in Laffer’s econometric models, at one point asserting the contentions of supporters of the plan are “disingenuous.” Ivester quoted a critic who has asserted Laffer is “crazy.”
Democratic Senator Richard Lerblance of Hartshorne pressed Jolley on the wisdom of ending several tax credits or exemptions, and on corporate income taxes, which will not be effected by the Edmond Republican’s proposal.
Jolley, the Appropriations and Budget chairman in the upper chamber pointed out that most individuals would pay zero or little in income taxes, in contrast to the levies they presently incur. He also noted that Oklahoma had to keep in mind the intentions of other states in the region and around the country where income tax cut or elimination proposals are under consideration.
Senator Jerry Ellis of Valliant criticized the plan for not leaving enough money to fund the needs of state government. He also asserted the measure was designed to “incite” people to go to the polls and vote.
Jolley pointed out the projection that government revenue would grow under the plan due to the “dynamic” effects of the tax reductions. In a tone dripping with irony, Ellis said the lack of debate participation by other Republicans indicated Jolley had “adequately informed his members” of the bill’s provisions.
Senator Judy Eason-McIntyre said she was opposing the measure in order to represent poor people in need of public services.
Senator Connie Johnson of Oklahoma City requested a quorum call to pull Republicans to the floor; when she attempted this again Sen. Sykes, as presiding officer, said she could debate but not force another call (a parliamentary maneuver to force senators to the floor).
Johnson assailed the bill, saying that proposals to provide services to those with disabilities, to counter teen dating violence, to counter teen pregnancies, to regulate treatment of dialysis and in favor of medical marijuana were not being considered. She said, “We continue to only regard one set of views and one set of plans.”
Jolley defended the proposition before the upper chamber. He noted the version under floor consideration reflected an important change after the bill moved to the floor, addressing concerns raised by retirees and Oklahomans in the military.
He said, “As amended, S.B. 1571 has protections to ensure the plan will not impact the incomes of Oklahoma retirees or our military.”
As described by Jolley and summarized in a Senate press release, in its first year S.B. 1571, if enacted, “would decrease the state income tax rate from 5.25 percent to 2.5 percent. No tax would be imposed on single filers with taxable income of $8,700 or less and for married filers with taxable income of $15,000 or less. After that, there would be annual reductions of .25 until the income tax is completely phased out in 2022.”
Individual tax credits, deductions and exemptions would be eliminated except for these:
· Active duty military compensation
· Retirement benefits from public pension systems
· Social Security benefits
· Certain deferred compensation distributions
· Retirement benefits from non-public pension systems
· Military retirement benefits
· Civil service retirement benefits in lieu of Social Security
After the vote, Jolley thanked colleagues for their support. He said, “This plan enables us to create a more prosperous state, attracting businesses and high-paying jobs while continuing to ensure the core functions of government remain a top priority. Passage of this measure represents a major turning point in our efforts to build a better future for all Oklahomans.”
Senate President Pro Temp Brian Bingman, a Sapulpa Republican, congratulated his colleague, saying in a statement sent to CapitolBeatOK, “Conservatives in Oklahoma have no greater friend than Senator Jolley — he should be applauded for his proven commitment to putting more money back in the pockets of hardworking taxpayers.
“Through a meaningful cut in the state income tax, and setting in motion the elimination of the tax over time, Senator Jolley’s bill will lessen the burden on our families while making Oklahoma more attractive to businesses that will create jobs in our state.”
Supporting the bill were 30 Republicans, including Bingman, Jolley and Sykes, as well as Sens. Cliff Aldridge of Midwest City, Mark Allen of Spiro, Patrick Anderson of Enid, Don Barrington of Lawton, Cliff Branan of Oklahoma City, Josh Brecheen of Coalgate, Rick Brinkley of Owasso, Bill Brown of Broken Arrow, Childers, Brian Crain of Tulsa, Kim David of Porter, Eddie Fields of Wynona, John Ford of Bartlesville, James Halligan of Stillwater, David Holt of Oklahoma City, Rob Johnson of Kingfisher, Ron Justice of Chickasha, Bryce Marlatt of Woodward, Mike Mazzei of Tulsa, Dan Newberry of Tulsa, Jonathan Nichols of Norman, Steve Russell of Oklahoma City, Mike Schulz of Altus, Ralph Shortey of Oklahoma City, Frank Simpson of Ardmore, Gary Stanislawski of Tulsa, and Greg Treat of Oklahoma City.
Voting against S.B. 1571 were 16 Democrats, including Adelson, Ivester, Eason-McIntyre, Lerblance, Johnson, Ellis and Sens. Roger Ballenger of Okmulgee, Randy Bass of Lawton, Sean Burrage of Claremore, Earl Garrison of Muskogee, Al McAffrey of Oklahoma City, Susan Paddack of Ada, John Sparks of Norman, Jim Wilson of Tahlequah, Charlie Laster of Shawnee and Charles Wyrick of Fairland; and Republican Sen. Harry Coates of Seminole.
The bill now moves to the House of Representatives.