OCPA’s Michael Carnuccio cheers legislative momentum for income tax phase out

Two dozen Republicans in the Oklahoma House of Representatives are initial co-sponsors of legislation to phase out the state income tax over a 10-year period, by implementing a methodical series of rate reductions, eventually ending the unpopular levy. 

The bill, House Bill 3038, is the most aggressive of a variety of income tax reduction proposals that will be considered in the 2012 session. 

Michael Carnuccio, president of the Oklahoma Council of Public Affairs, has pressed for the income tax rate reduction and eventual phase out. He expressed gratitude for the strong stance taken at the Capitol.

In a video interview this week with CapitolBeatOK, Carnuccio said, “We are very excited, not only due to the fact that OCPA’s research has helped in the legislative process, but for the fact that you now have here in Oklahoma lawmakers who promised last session or years before, who had promised to tackle issues of taxes and to spur the economy, … immediately coming right at it, and they’re being bold.”

He said last week’s announcement was encouraging, and added, “This is the type of leadership that the people of Oklahoma have been asking for and this is kind of leadership that puts Oklahoma on the map.”

Carnuccio’s organization is planning to hold an event at the state Capitol in early February to pose the rhetorical question, “What Would Reagan Do?” Certainly, the momentum for a major phased-in reduction in state tax burdens is evocative of the three-year phased-in income tax reductions of the early Reagan era. 

Carnuccio commented, “I think the goal overall is ‘how can we spur Oklahoma’s economy? How can we continue to be competitive?’ Recognizing that every other state and global markets are continuing to become more competitive themselves.”

Although a range of possibilities is being discussed at the Capitol right now, what they have in common is the theme of low taxation and more economic growth. He reflected, “we have options on the table. It’s even more encouraging that the bulk of the energy is on completely eliminating the income tax.”

He noted, “When businesses pass by Oklahoma to go to Texas or Florida, they’re not saying, ‘well, if you had a two percent rate, I’d come here.’ They’re saying, ‘There’s no income tax in Texas, so I’m going there.’ So, let’s phase ours out. 

“When you’re talking about a 10-year span, it makes more sense to phase it completely out over those years. You have plenty of time to adjust to other government revenues, and make sure that you can fund core government services.”