State Sen. Scott Pruitt, today introduced legislation reducing the state income tax from 6.25 percent to 4.9 percent. When fully implemented in 2007, it would be an annual, across the board cut in the state income tax cut of $481 million.
Pruitt cited double-digit growth in state spending last year alone and at least $610 million in new money in the next fiscal year as evidence the cut was necessary and affordable.
“Last year state government grew by 12 percent. Politicians set a record by spending $200 a second and then sent taxpayers a $45 rebate check. I believe their priorities are backwards. Instead of spending first and returning to taxpayers what little is left over – let’s prioritize our spending, and provide meaningful tax relief for all Oklahomans that spurs the economy,” said Pruitt.
Senate Bill 2022 calls for a 1.35 percent reduction in the Oklahoma state income tax, lowering it from 6.25 percent to 4.9 percent. – a reduction of more than 21 percent. SB 2022 would take $183 million of growth revenue to offset the immediate impact of reducing state tax revenues for the fiscal year that will begin July 1, 2006. Within two years, the annual savings to Oklahoma taxpayers is estimated at $481 million annually.
“If you’re a family of four making $40,000 a year, this tax relief will mean you get to keep $540 more of your own money. As hard working Oklahomans spend that money to start a college savings plan or buy a new set of tires, it will have a ripple effect and multiply across our economy,” said Pruitt.
Pruitt contended the economic growth stemming from the cut would more than offset the long-term impact in state tax revenues.
“It’s simple supply-side Reaganomics. When you cut taxes across the board, consumer spending increases and economies boom. The end result is a larger tax base and increased revenues going to the state,” said Pruitt.
Pruitt went on to say at a time when there has been an exodus of employers, conservative Republicans must get back to the basics and enact pro-growth policies that bring employers to the state.
“Tulsa is hurting for jobs and GM is closing its doors. The Legislature needs to stop chasing after those who are leaving and start enacting tax reforms that bring employers and jobs to us. This is a time for conservatives to get back to the basics and remember what it is we do best – create meaningful tax relief and pro-growth policies that prosper Oklahoma,” said Pruitt.