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State House speaker looks to cut corporate, income taxes

Oklahoma House Speaker Charles McCall.  [Chris Landsberger/The Oklahoman]
Oklahoma House Speaker Charles McCall. [Chris Landsberger/The Oklahoman]

House Speaker Charles McCall is advancing measures to reduce corporate and personal income taxes.

“I have introduced these bills to largely start a conversation about tax relief in our state given the rebound from the pandemic and to make our state’s profile more competitive for jobs and industry in the future,” McCall, R-Atoka, said Thursday. He intends to move the bills along through the legislative process in this session.

The language on House Bill 2041 is being worked on, but the goal is to reduce the top personal income tax to below 5%, McCall said.

A quarter of a percent drop in the personal income tax would reduce money to the general revenue fund by $185 million, McCall said, noting that the state has over $1 billion in reserves this year.

The House Rules Committee on Thursday advanced House Bill 2083, which would phase out the corporate income tax over five years, costing about $65 million annually.

He believes the measure would lure additional businesses to the state and generate revenue.

The 6% corporate income tax rate makes the state uncompetitive and is a volatile source of revenue, McCall said.

“I think it is worth nothing that the corporate income tax only accounts for less than 4 percent of the general revenue fund for the state,” McCall said. “It is not a significant revenue generator for the state.”

It takes a supermajority of both chambers to increase taxes.

McCall said the two measures would be structured in such a way that a supermajority would not be needed if the state needed to pause or alter course.

Lawmakers recently struggled with obtaining a supermajority to raise certain taxes to pay for a teacher pay increase.

Some of the loudest critics of reducing taxes come from the education community.

McCall said education would not need to worry about cuts if the measures are passed.

“We also have the funds available to make further investment in education this year,” he said.

“From the beginning, I’ve said we need more taxpayers, not more taxes,” Gov. Kevin Stitt said in a statement.

“Lowering taxes on Oklahoma families and businesses continues our push to make Oklahoma a Top Ten state and make it even more attractive for companies to bring more jobs and grow and diversify our economy,” Stitt said.

House Minority Leader Emily Virgin, D-Norman, was asked about the bills during her weekly media availability.

She said the process of introducing the bills has been very flawed and lacked transparency.

Virgin said her caucus has called for targeted, specific tax reform, such as returning the refundability of the earned income tax credit and creating another tax bracket to make those who make more pay more.

“It seems the priority is to allow corporations to get yet another tax break,” Virgin said.