Oklahoma has been subjected to tax policies from national think tanks that have never shown any creditable evidence that these tax schemes produce the promised results. It is time for Oklahoman's to do their own thinking about how to fund our state. Only by using factual evidence and honest evaluation of legislative policy proposals can we fix the crisis that has robbed our state of billions in revenue funding. Funding that should be used for our core services, such as public education, health care, veteran services, and infrastructure.
How do we start?
Raise GPT to a minimum of 7%. All oil production is sold at spot market pricing, whether your product comes from Louisiana (13.3%) or Oklahoma (5%). It has little impact on the pump. We must raise GPT to at least 11% to make up for the revenues lost (at least $600 million) imposed by ill advised tax giveaway.
Est revenue addition: $200 million per year.
Restore the estate tax add-on. Part of the purpose of higher tax rates on larger incomes and earnings, and passing of wealth accumulations though inheritance, is to bring money that would otherwise be hoarded back into our economy. Currently, Oklahoma collects no estate tax. According to the Oklahoma Policy Institute this costs Oklahoma $90 million dollars every year.
Est revenue addition: $90 million per year.
Repeal the Capital Gains Incentive . Our Capital Gains Incentive has no Oklahoma reinvestment requirement. This means that if you invest in Arkansas, you still get a break on Oklahoma taxes. Oklahoma tax payers are paying out $125 million dollars a year for corporations to invest money anywhere, not just Oklahoma. From 2010- 2014, $465 million dollars in tax breaks were given to large Oklahoma companies for a reinvestment of $9 million dollars locally.
Est revenue addition: $125 million per year.
Reform Individual and Corporate State Income Tax Rate. By returning rate schedules to those that were in effect in 2008, expand our brackets to more realistic levels, and restore deductions that have been removed for the typical Oklahoma family, including the Earned Income Credit (EITC). The impact on the average Oklahoman will be minimal. Unrealistic tax cuts at the top, approved by the Legislature, are primarily responsible for the revenue slowdown.
Est revenue addition: $1 billion per year.
Adopt combined corporate reporting. The lack of this provision allows multi state entities to escape Oklahoma Taxation. Some multi-state corporations shift income to out-of-state subsidiaries to escape state tax liability. Most states with a corporate income tax have adopted a reform known as combined corporate reporting that effectively halts this tax avoidance strategy. and ensures that multi-state corporations pay their fair share of taxes just like local businesses.
Est revenue addition: $157 million per year.
Let's use Oklahoma solutions to stop this 10 year slide into failed governance. These are just of a sampling of the actions we could implement quickly to address our dwindling revenues.