Visitors from Kansas and Missouri encourage Oklahoma income tax phase out
Published: April 5th, 2012
A trio of supporters of lower taxation on Thursday (April 5) participated in a briefing for reporters, legislators and members of the public, aiming to boost support for proposals to reduce, and eventually phase out, the Oklahoma state income tax.
Steve Anderson is an Oklahoman who is now working as budget director for the state of Kansas. He was appointed to the post by Governor Sam Brownback, a Republican who formerly served in the U.S. Senate.
Anderson was home to speak at a tax policy seminar hosted by the Oklahoma Council of Public Affairs (OCPA) at the state Capitol. In an interview with CapitolBeatOK after the seminar, Anderson described the push in Kansas to eliminate small business income taxes, and put the personal income tax on a glide path to elimination in the next five to six years.
Anderson said his state’s effort is “very similar” to Oklahoma’s. However, he continued, “you have been blessed by 10 years of relative conservative leadership in Oklahoma. Relative to us – we followed HHS Secretary Kathleen Sibelius into office, who had a different philosophy, that’s certainly a huge difference.
“However, we are on the same track. We are tracking on income taxes, and social policy the first year. We corrected some of the issues we had there. Now, we’re dealing with the tax issues, to make ourselves competitive.”
A certified public accountant (CPA) with two decades of experience, Anderson has written frequently on tax and budget policy for OCPA. He crafted a memorandum, “A Tale of Two States: The Real Effect of Individual Income Tax Cuts,” that is driving the tax cut debate in the Sunflower State.
Anderson told CapitolBeatOK, “The governor had a great agenda. One was to eliminate the income tax on small businesses. We always argue as Republicans that small business is the economic driver of the country. Well, the governor believes that. He’s certainly made that the centerpiece of his tax program.
“We would bring individual income tax rates down to 4.9 percent and then we would start a growth to zero income tax, as we grew revenues. We would cap revenues at 3 percent, revenue growth, and anything over that would go to tax cuts.”
Anderson says the process “conceivably” could be completed within six years – if, that is, “we get it passed this year. If we have a good economy and we get the sort of impact we believe we would get out of indicating to business — ‘come to Kansas, because this is a place where individual income tax is going to disappear.’”
Anderson message to the Oklahoma Legislature was direct: “I would say ‘get on board’ – or you will be that income tax sandwich that Governor Fallin warned about.”
Also speaking at the Capitol event was Missouri initiative activist Travis Brown, who is director of the “Let Voters Decide” Committee pressing a ballot measure to eliminate personal income taxes in the Show Me State.
He said, “In your case, I’m pleased to be debating and learning from the legislators here that there is a very serious effort to cut or possibly eliminate the taxation of personal income to make this economy competitive for jobs – for your neighbors to the south, and your neighbors like us, to the north, who are quite serious about implementing what the Wall Street Journal referred to as ‘the heartland tax rebellion.’
“We know from our neighbor to the west in Kansas, and your neighbor to the north, that many states right now are looking at aggressive plans to build and restore their economies for small business growth in the future by cutting or eliminating taxation of personal income. We think that is a very wise decision. We applaud the leadership here in Oklahoma, and hope – or know – that it would inspire a number of other states to do the same.
“We all know that Texas, Tennessee, Nevada, Florida, South Dakota and a variety of other states benefit greatly from not having taxed the most mobile of all small businesses and their resources, and that’s their income. So, we know that this is a very important time a very important decision before the Oklahoma Senate and the Oklahoma House of Representatives, to get right.”
Brown explained, “The process of building a ballot initiative like this has already taken over five years of legislative, constitutional and legal research. We have already been in the field collecting signatures. We’ve been challenged by some opponents in court. We’re waiting on a court ruling.
“Our ballot certification process or season ultimately concludes in mid-May, and we’ll have to see where things go from there. Make no mistake, we’d like to have our jobs and our businesses back that we’ve lost in Oklahoma. We want every state, including yours, to be competitive. We know this is good policy for jobs and economic growth.”
Also speaking for the OCPA event was Joseph D. Henchman of the Tax Foundation in Washington, D.C. Henchman told attendees Oklahoma’s “Tax Freedom Day” is Sunday, April 8. While the rest of the country’s Tax Freedom Day falls on April 17, Oklahoma in the past year moved from 41st among the 50 states to 39th.
Oklahoma Policy Institute held a conference of its own at the Oklahoma History Center, presenting a range of arguments against income tax reduction or elimination.
Several tax phase out and/or reduction bills are pending before the Legislature, and Governor Fallin has called for a major tax cut this year.