Lately, one of the biggest priorities of both conservative state lawmakers and Republican presidential candidates has been the reduction or elimination of the income tax. But a new analysis of one such plan receiving consideration in Oklahoma should give pause to backers of this “reform.”
According to ITEP, over half of Oklahoma households would actually see their tax bills rise under a plan put forth by The Oklahoma Task Force on Comprehensive Tax Reform (heavily stacked with business interests), and low-income families would face the largest tax increases relative to their income. Upper-income families, by contrast, would enjoy a bonanza, with the richest one percent taking home over $2,800 in tax breaks per year.
These are the predictable results of a plan that cuts Oklahoma’s top income tax rate and pays for it by eliminating some of the state’s most important and progressive tax credits and exemptions.
We’re usually big supporters of wiping out special tax breaks, but only when it’s done fairly. And as the numbers above make clear, the Task Force’s plan is far from fair. It does away with proven low-income provisions like the Earned Income Tax Credit (EITC) and the sales tax relief credit, and it scraps important and very popular breaks like the child tax credit and even the personal exemption. Meanwhile, itemized deductions, which disproportionately benefit the richest families in Oklahoma – or any state, – are left largely untouched (except for the long-overdue elimination of the ridiculous and rare state income tax deduction for state taxes paid).
The Oklahoma plan is just the latest manifestation of a broader conservative tax platform that thinks the working poor are getting off too easy, and the rich deserve to see their tax rates slashed. ITEP’s analysis makes a case study of Oklahoma under this disastrous plan; are other legislators listening?