Oklahoma's wealthiest citizens would be the biggest beneficiaries of Governor Keating's proposed income tax cut, according to a new analysis by the Senate staff. The study indicates almost 80 percent of the $777 million tax reduction would go to less than one-quarter of Oklahoma taxpayers, those who make more than $50,000 a year.
"This rising tide doesn't lift all boats, just the yachts. It's a tax giveaway for the rich that leaves the average, middle class Oklahoman out in the cold. A far better use of the money would be an investment in education. That helps the state economy and all Oklahomans, not just an elite few," said Senator Cal Hobson, vice-chairman of the Senate Appropriations Committee.
Governor Keating, a millionaire, has proposed that the income tax be cut in half over the next 6 years at a cost of $777 million.
"This is one of those election year campaign pledges that looks good at first blush, but falls apart pretty quickly when you read the fine print," added Hobson.
The findings of the Senate analysis include:
"This is the old trickle down strategy where you give the rich a bunch of money and hope they'll throw a few crumbs to the majority of people who have to work hard everyday to support their families," said Senator Hobson.
The Keating tax program will hit the Oklahoma middle class in more than just its pocketbook, according to the Lexington legislator. That's because Governor Keating will have to take money from other state services to pay for it. In the short term, the Governor plans to raid state pension funds to finance the reduction. In the long term, the money will ultimately come from education, the biggest ticket item in the state budget.
"No matter how creative Governor Keating is with his math, his income tax cut will ultimately be coming out of education's pocket. When you slice off almost one-quarter of the budget pie, you drain money from the public schools and every other big ticket item from prisons to highways," said Senator Hobson.
"Cutting education goes against all of the advice of the economic experts. For most Oklahomans, good public schools and universities are their only ticket to a bigger income and a better life. Taking that away from them just to finance a big tax cut for the rich is unconscionable."
The Senate budget leader pointed out that two recent polls, one of Oklahoma economists and one of average citizens, showed little support for Keating's tax cut and a strong desire to put more money into education.
"I don't see much support for this outside of Governor Keating's inner circle of friends. I think most Oklahomans see this for what it is: an election year campaign promise that probably won't be kept and even if it is won't benefit very many people," said Senator Hobson.