Oklahoma Senate Leader: Chamber Won't Be Part Of Push To Eliminate Corporate Income Tax
The leader of the Oklahoma Senate said the chamber, his caucus and he personally have no appetite to take up a plan House Republicans passed last month to eliminate the state’s corporate income tax.
House Bill 2083 would phase out the corporate income tax over five years through increasing deductions. Senate President Pro Tem Greg Treat (R-Oklahoma City) said there needs to be more than politics behind a move like that.
"As a Republican, yes, we cut taxes. That’s a great political statement. We’ve got to get beyond the politics of it and see is it the right policy. And when you look at the corporate tax, it is an unstable source of revenue, there’s no doubt about it. But, about $90 million of it goes off the top into things like teacher retirement," Treat said.
A legislative analysis puts the cost of eliminating the corporate income tax at $642 million over five years. House Speaker Charles McCall (R-Atoka) supports getting rid of the tax as a way to make the state more competitive in landing businesses.
Treat said the state budget only looks like it can accommodate the tax cut because lawmakers cut $500 million more than they actually needed to last year.
"And then there is a non-quantified amount that is coming off of federal unemployment-type benefits, federal monies going to agencies, federal stimulus checks to individuals, and I think this is not an appropriate time to be looking at a $642 million over the course of five years hit to the budget," Treat said.
Treat said there are ongoing discussions about a personal income tax cut equivalent to a 0.25% rate reduction. House Bill 2041 passed with most House Democrats in support because it also makes the Earned Income Tax Credit refundable again, letting lower-income families get money back if it reduces their tax liabilities below $0.
That bill would reduce state collections by nearly $200 million.