Oklahoma Senate passes $480 million income tax cut bill

Journal Record, The (Oklahoma City), Mar 15, 2006 by Marie Price

A bill that would cut state income taxes by $480 million passed the state Senate on Tuesday after lengthy debate.

Senate Bill 2022 is authored by state Sen. Scott Pruitt, R- Broken Arrow, who is running for lieutenant governor.

Pruitt's measure, which would reduce Oklahoma's top income tax rate from 6.25 percent to 4.9 percent, would affect taxes beginning with the 2007 tax year.

With a surplus of almost $1 billion this year, it seems perfectly clear that the state is taking too much from our citizens, Pruitt said.

The $1 billion to which Pruitt alluded comprises cash on hand, rainy day funds and anticipated surplus.

This simply ensures Oklahomans can keep more of their own money, and that's money they'll save, invest or spend, all of which are going to be good for our economy, Pruitt said.

Pruitt said $183 million in growth revenue would offset the immediate impact of the tax cut.

State Sen. Kenneth Corn, D-Poteau, spoke against the move.

He reminded members of the budget cuts and tax increases that followed the oil bust.

We've never recovered from the bust of the 1980s, Corn said, urging lawmakers to be fiscally responsible.

State Sen. Frank Shurden, D-Henryetta, said that decades ago legislative veterans counseled against permanent tax cuts that would erode the tax base.

What you give away now, you're never going to get back, he said. History always repeats itself.

Shurden also pointed out that legislators can no longer easily raise taxes.

The Oklahoma Constitution requires that all tax increases be put to a vote of the people unless they achieve a three-fourths majority in both houses of the Legislature.

Pruitt said it's time for lawmakers to do something significant, to send $480 million back to the private sector.

Historically, we know that significant tax relief results in economic growth and that's exactly what we can expect to happen with my proposal, he said.

Pruitt also said the tax cut would help attract new business and jobs to the state.

Last session, lawmakers reduced the top income tax rate from 6.65 percent to 6.25 percent. They also boosted the state standard deduction from $1,000 to $2,000 for single taxpayers or couples filing separate, and from $2,000 to $3,000 for heads of households and couples filing jointly. For the latter two categories, the deduction rises to $4,000 during the second year.

Taxpayers also received rebates of either $45 or $90 last year, depending on their filing status.