The Oklahoma Senate Chairman does not support legislation to phase out the state’s corporate income tax over the next five years.
Senate Pro Tem Greg Treat, R-Oklahoma City, said there isn’t widespread support in the Oklahoma State Senate for House Speaker Charles McCall’s proposal, meaning the hotly debated tax cut legislation is unlikely to succeed this year.
“We live in a time that is financially uncertain after going through COVID,” Treat told reporters on Thursday. “We are in very good financial shape as a state, but I have to remind you that we cut the (state) budget by $ 1.3 billion last year.”
Part of the reasons the state’s finances are currently thriving is because the federal COVID-19 stimulus fund goes directly to Oklahomans and comes through the state government, Treat said. He indicated that the financial picture of the state could change when there are no more economic funds.
To attract more businesses to Oklahoma, McCall proposed cutting the state’s 6% corporation tax by 20% annually over a five-year period. In a house floor debate, House Appropriations Chairman Kevin Wallace, R-Wellston said that if fully implemented, McCall’s House Bill 2083 would result in a $ 377 million annual decrease in tax revenue.
However, Treat said the proposal would cut $ 642 million in taxes over the next five years, including some funding for the teacher pension system.
The House is campaigning for tax breaks for all Oklahomans, and a tight Senate proposal to cut some taxes on auto sales will not boost the economy or help all Oklahomans like the House-approved tax break plan, McCall said in a statement.
“Given President Biden’s efforts to raise federal taxes, Oklahoman taxpayers and corporate taxpayers will be very disappointed if the Republican state Senate does nothing to offset the impending Democratic tax hike,” he said.
It was only a few years ago that lawmakers struggled to collect more than $ 500 million in taxes to fund teacher salary increases, Treat said.
“I was here three sessions ago when we started teaching and we worked together to get the income to meet our commitments,” he said. that the corporate tax cut is appropriate at this point. “
McCall has another bill that would give all Oklahomans personal tax relief by lowering the income tax rate.
House Bill 2041 would also restore the recoverable aspect of the Oklahoma Earned Income Tax Credit, which lawmakers eliminated in 2016 to fill a budget gap.
Discussions about this bill are ongoing, Treat said.