How would you like to avoid paying taxes on your hard work and labor to the state of Oklahoma? Citizens in Texas, Florida, and even Tennessee don’t have a state personal income tax. Maybe that’s why so many businesses are moving there!
The Hoover Institute recently released a report documenting that 352 companies with high-paying jobs left the state of California from 2018 to 2021. 43%, or 153 of those companies, left just last year. Their top destination was Texas which got 132 of the businesses. Tennessee came in second with 31. Nevada, Florida, and Arizona rounded out the top five.
Four of these five states do not have a personal income tax, and Arizona has a new flat tax of only 2.5%. It’s high past time for Oklahoma to join the ranks of the no-income-tax states if we truly want to be a top-tier state for job and population growth.
Imagine a hard-working Oklahoma household with both spouses making $53,780. That’s the average income per worker in Oklahoma for 2021 according to the Federal Reserve Economic Data (FRED). Currently, that family, in simple terms, must pay $5,109 of their hard-earned wages to the Oklahoma Tax Commission because of our 4.75% income tax rate.
If we eliminated the income tax rate and shifted to more of a sales-based activity system, the family would likely save some of that money, reduce debt with that money, and give some away to help others. The remaining portion, let’s call it 80% or $4,087, would likely be spent at local businesses— which would increase their profitability and economic impact.
The state would still receive, at say a higher sales tax rate of 8% from the current 4.5%, around $327, a large overall savings for our family of $4,782! Can you see why tax reform is good, and why 11 other states have no income tax? Tax reform is never quite this cut and dry, but it’s the best way forward for more growth and prosperity for our kids and grandkids.
Are you ready to join the movement?
About the author: Mike Mazzei, CFP®, MPAS®, is the President of Tulsa Wealth Advisors. A Certified Financial Planner professional, and Master Planner Advanced Studies, he created The Financial Freedom Process™ to help individuals leverage their wealth in order to help them achieve their lifetime visions. Mike is a former Oklahoma State Senator (Dist. 25 in Tulsa) & Sec. of Budget. He is the proud husband to Noel and father to 5 great kids.