Jolly: Cut Taxes - Journal Record
Oklahomas economy is finally showing signs of renewal. In 2011, personal income grew faster in Oklahoma than in any other state in the nation except the Dakotas. Our unemployment rate, 6.1 percent, is the eighth lowest in the nation. Actual tax revenues coming in have beaten revenue forecasts for seven consecutive months.
Lawmakers have an opportunity to lock in our path to economic prosperity. The proposal that can do this: lowering and gradually eliminating the income tax.
Lowering taxes boosts economies and increases residents incentive to work, produce, and save. When more money is left in the hands of individuals and businesses, they tend to buy more goods, invest in new equipment, and hire more workers.
The states with the best tax climates experienced an astounding 152 percent faster economic growth rate and created 445 percent more new jobs from 2000-2010 than those with the worst tax climates.
According to a recent study by the economist Art Laffer and sponsored by the Oklahoma Council of Public Affairs, gradually phasing out income tax by 2022 would lead to 20 percent faster personal income growth, boost the economy enough to create an additional 312,000 jobs and save the average family of four nearly $2,000 per year on taxes.
This move would also make Oklahoma one of the most competitive states in the country in terms of attracting businesses: Oklahomas overall tax burden would fall to the second lowest in the nation, behind Alaska.
Gov. Mary Fallins tax plan lowers the rate to 3.5 percent for couples making over $70,000 and 0 percent for couples making under $30,000, with only three brackets versus the seven we currently have. Not a bad start.
Some might say that eliminating the income tax would devastate government revenues and leave the states fiscal house in disarray. But this is shortsighted, as the increased economic activity brings more revenues into the states coffers.
Texas has no income tax. Kansas and Missouri are considering eliminating theirs. To put Oklahoma on the map as one of the best places to do business in the country, we need to eliminate our states income tax to at least remain competitive with our neighbors.
Published in Journal Record Feb. 10, 2012