House Bill 3038, authored by Cockroft and 30 other House lawmakers, would phase out Oklahoma’s personal income tax over 10 years.
“We have the opportunity to attract more businesses to Oklahoma and grow the businesses that are already here by reducing the tax burden on job-creators,” said Cockroft, R-Tecumseh. “This bill would also help working families out by allowing them to keep more of their hard-earned money.”
Under House Bill 3038, the state’s top income tax rate would be cut from 5.25 percent to 2.5 percent. After that, there would be annual reductions of .25 until the income tax is completely phased out in 2022.
House Bill 3038 would repeal Oklahoma’s progressive personal income tax without necessitating increases in other tax rates or cuts in funding to core government services.
Were Oklahoma to eliminate its personal income tax without raising or expanding any other tax rates, the state would have the lowest overall tax burden in the continental United States.
“More than $800 million in non-core spending cuts have already been identified that could be eliminated to offset the reduction in revenue achieved by the tax cut,” Cockroft said. “The end result of this legislation would be a leaner government that focuses on true core services and an increase in take-home pay for all Oklahomans.”
House Bill 3038 passed the Oklahoma House of Representatives on a 58-35 vote today. It now proceeds to the state Senate.