Oklahoma’s Sen. Patrick Anderson has filed Senate Bill 240 to replace Oklahoma’s current income tax structure with a flat tax of 2.95%.
Anderson asserts flat tax plan is simple, fair, and revenue neutral. Additionally, the plan would result in Oklahoma having the lowest income tax rate in the nation, among the 43 states that do impose an income tax.
SB 240 would eliminate all current income tax deductions, credits, and exemptions. Under the proposal, the state income tax rate would be cut nearly in half, and yet there would be no loss of revenue to state government. The Oklahoma Tax Commission has reviewed the numbers and determined that a flat rate of 2.95%, as Anderson has proposed, would be revenue neutral.
“The bottom line is if you replace our current tax system with a flat tax, then all taxpayers are treated equally,” said Anderson, R-Enid. “This flat tax offers tax relief to all Oklahomans, and it has no negative impact on the state budget. It would be a great selling point for businesses that are looking to relocate to our great state.”
If Anderson’s flat tax proposal is adopted, Oklahoma would join seven other states which already have a flat tax. Those states are: Colorado; Illinois; Indiana; Massachusetts; Michigan; Pennsylvania; and Utah. States with no income tax include: Alaska; Florida; Nevada; South Dakota; Texas; Washington; and Wyoming.