Some Oklahomans Are Fighting To Keep OK State Income Taxes
For years the biggest comparison between Oklahoma and Texas has been "Texas is better because they don't have a state income tax." As the movement to end Oklahoma's income tax starts flying through the state legislature, some Okies are out to remind people how the state will get its full tax revenues in the long run.
You've heard this a million times... Only two things in life are absolute. Death and taxes. It's the same now in 2022 as it was in 1922. Government bodies collect taxes to run the state. Without taxes, there is no money to do that, so we generally accept taxes as a whole... but then again, what about the nine states that do not have income taxes?
Alaska, Florida, Texas, Nevada, South Dakota, New Hampshire, Tennessee, Washington, & Wyoming. Those are the states that do not collect income tax from their residents, but the governments in those states have no problem getting their tax revenues to hit budgets... makes you wonder how.
I'm far too lazy to research beyond a simple web search how these states collect tax revenues without an income tax, and the two common answers are enough to make any Oklahoman think "We should keep our state income taxes."
Property tax and smart spending.
While property taxes may not be a concern in a town like Lawton, having so many renters, you must understand that when property values go up, rent goes up accordingly.
Across the state of Oklahoma, we enjoy relatively low property taxes. The state average is right around 0.87%, but it varies based on where you live. If you live in Comanche County you pay 0.95% on the value of your property whereas if you lived in Norman you'd pay top dollar at 1.160% in property tax.
Given that the national average is right around 1.07%, those values aren't that far off.
If you look at Texas, the state property tax average across the board is 1.69%... You'll enjoy a slightly lower rate of 1.440% if you opt to live in a place like Holliday, TX... but if you put down roots in any place people actually want to be, like the Austin suburb of Elgin, that tax bill cuts deep at a staggering 2.6453%...
That's just one of the ways how Texas manages to make up the tax revenue difference in not having an income tax.
The list really goes on... South Dakota - 1.220% average. New Hampshire - 2.05% average. Some states without an income tax are higher, others are lower. In fact, Alaska is the only total tax holdout not levying a property tax on its citizens since tax revenues are heavily subsidized by the substantial oil and gas industry up there... meaning technically we are paying into Alaska's tax basin when we fill up our gas tanks.
Excise tax, use tax, vehicle weight tax, sales tax, etc... There is no getting around being taxed, every local and state government is getting it one way or the other. This is one reason so many Oklahomans are fighting against ending the state income tax.
According to the argument, it's the progressive income tax that fairly taxes each individual based on actual earnings... whereas the taxes that will either be put in place or raised to make up the difference will tend to tax one amount across the board. The argument is the person making minimum wage will then be taxed, or rather not taxed at all on their earnings equal to the person earning $300,000 each year.
The legislation to end the Oklahoma income tax has already passed through the committee and will now move on to be argued for and against by your state representatives.
It's hard to see who is right and who is wrong on both sides of the argument. Truth be told, the answer is probably somewhere muddied up in the middle as both sides have something to gain from a move like this. The only thing that remains true is, there are only two absolutes in life, and the state will get its full taxes one way or another.