Last week’s report from Oklahoma’s Task Force on Comprehensive Tax Reform said the state’s top personal income tax should be cut by 0.5% over the next two years from a ceiling of 5.25% in 2012 to 4.75% by 2014.
The plan also called for a cut in the corporate tax rate to 5% from the current 6%.
The reductions would be paid for by eliminating 46 tax credits and the personal exemption deduction. Losing those deductions would bring in an additional $352.9 million a year.
The state should have a policy of eliminating the personal income tax in seven to 10 years, the task force recommended, while reducing operating costs.
Tax preferences and incentive programs would be eliminated or severely reduced.
Taking away the personal exemption deduction would generate approximately $133 million a year.
The report said two of the credit programs, one for small businesses and a rural venture-capital effort, would save Oklahoma $275 million over three years.
The proposal would also remove credits for filmmaking, railroads and coal production.
The plan was delivered to Gov. Mary Fallin and legislative leaders last week.
Gubernatorial spokesman Alex Weintz said Fallin supports the gradual elimination of the personal income tax along with tax credits that do not lead to job creation.
“The governor continues to be encouraged that so many members of the Legislature have expressed strong support for eliminating underperforming tax credits and reducing the state income tax,” Weintz said.
