In his regular discussion of Oklahoma’s monthly gross tax receipts, Treasurer Ken Miller discussed Oklahoma’s framework for tax collections, saying an eventual vote of the people on a new tax structure seems likely, and desirable.
As he has in recent weeks, Miller repeated the Wednesday (January 4, 2012) session his concern that cutting state income tax rates should be approached cautiously.
Elaborating, Miller said that if the state could design a tax structure to encourage entrepreneurship and encourage economic growth, it would not be the system now in place.
Pointing to last week’s report from the state Senate’s Task Force on Comprehensive Tax Reform, Miller said the work of Sen. Mike Mazzei and his colleagues were part of “a good discussion that is beginning.” As for the tax structure, “we have to get it right.” Miller said his concern in the matter is “economics, not politics or ideology.”
Miller said taxes should be “lower, flatter and fairer.” He asserted, “We can do better than the system we have.”
In an interview with CapitolBeatOK after Wednesday’s briefing for reporters, Miller elaborated on his view a comprehensive refashioning of Oklahoma’s tax system is desirable, and that it should be subject to popular ratification.
He said, “If we are going to have a major change in the way that the people are taxed, then I think that needs to be endorsed by the people, or rejected by the people.
“This is their government. This is their tax structure. I think they should have a direct say in how they get taxed.
“We all know that we don’t like taxes. We all know that they are necessary to fund those services on which our people depend, whether it’s education or transportation or public safety.
“But, there is an optimal way to go about bringing those revenues in to support those necessary services. I think that the system that we have right now is not optimal. I think we can devise a better system, but I think the people should endorse it when we do.”
Miller expressed support for the “great discussion” on tax credits and business incentives which state Rep. David Dank guided through the Task Force on State Tax Credits and Economic Incentives, which concluded its work December 21 after approving a report dated Dec. 31. He expressed home that eliminating or limiting some programs will allow some reduction in state income tax rates. Miller supported the final report of the Dank task force, on which he served, while stressing that he wanted further study of some proposals.
Sen. Mazzei, a Tulsa Republican, released last week a report recommending that the top income rate drop from 5.25 to 4.75 percent over a two-year period. The panel also encouraged reductions in corporate income tax rates from 6 to 5 percent.
In a statement sent to CapitolBeatOK, Mazzei reflected, “The non-partisan Tax Foundation has rated Oklahoma’s overall tax structure 30th in the nation when rating our job creation environment. We must transform the tax code; it is simply wrong when a special interest group benefits from an obsolete or ineffective tax preference at the expense of hardworking Oklahomans who deserve to keep more of their hard-earned income.”
Sen. Rick Brinkley, an Owasso Republican, commented, “These reforms are aimed at simplifying tax law and reducing rates for individuals and businesses. The overall goal is to grow our economy while continuing to make crucial investments in core government services such as education, transportation and public safety.”
State leaders are actively studying the proposals from both Dank’s and Mazzei’s panels, and a dramatic proposal from the Oklahoma Council of Public Affairs (OCPA) to phase out the personal income tax levy over a 10-year period.
While some ideas would not require a popular vote (the income tax rate has been reduced several times without necessitating a referendum), proposals substantially to remake the mix of taxes used to fund state government would, in the views of some, trigger the need for a rewrite of the state’s populist-oriented constitution.