The Other Benefits of Eliminating State Income Tax‏

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Last week, legislators had to meet one of the most important legislative deadlines of the year. In order for a bill to stay alive in the legislative process, it had to be approved in its House of origin by last Thursday. Bills not receiving a vote are no longer eligible for additional consideration. A bill sponsored in the House of Representatives had to win approval of the House, and a bill originally sponsored in the Senate must have been approved by the Senate.

Just a fraction of the bills that were originally sponsored made it past this deadline. The bills that survived must now go to the other legislative chamber for consideration.

Shortly before the deadline, the House approved legislation to reduce and potentially eliminate the state’s income tax. The proposal has survived the deadline and is still evolving as the session progresses.

You have probably read the various benefits of scaling back the state income tax until it is no longer needed. These include the obvious economic benefits that will increase the state’s tax base and lower
the tax burden on the individual citizen. It is important to note these types of facts; however, some of the most attractive components of eliminating the state tax are often overlooked.

With the elimination of the income tax, the entire component of state government dedicated to enforcing the income tax and all of the associated elements will no longer be necessary. Income tax policy is a very complicated matter and the related costs to the citizens is substantial. The cost to fund the tax compliance and enforcement departments is obvious. Every time politicians change tax credit policy, add a new tax and reporting requirement such as the recently constituted Business Activity Tax, or just change tax policy, the cost to the taxpayer goes up because the bureaucracy must enforce these mandates.

Worse still, politicians use the tax code as a way to centrally manage the economy, thus picking the winners and losers in the free market. When politicians want to stop a free market activity, they tax it. When they want to encourage an activity, they use the tax code to subsidize it. This is one of the primary reasons lobbyists and special interests invest so heavily in politicians. They know that politicians control the income tax code and can use the tax code to reward those who can afford the influence. Taking away the income tax takes away the ability of politicians and special interests to manipulate and centrally manage the economy through the income tax code. This should result in a smaller, more ethical government.

The income tax also presents an unfortunate encroachment on the privacy of the taxpayer. Why should state government keep a database containing the details of the taxpayer’s private economic livelihood? Eliminating this tax means all of these personal details will no longer have to be submitted to and maintained of file with the state government.

These are just a few of the benefits to the taxpayer that will occur with the implementation of this important reform.

State Representative Jason Murphey
2300 North Lincoln Blvd
Oklahoma City, OK 73105
1(405) 557-7350 (Office)

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