Chambers of Commerce: Income Tax Elimination Won’t Guarantee Economic Activity

• Joe Wertz
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  Joe Wertz was a reporter and managing editor for StateImpact Oklahoma from 2011-2019. He reported on energy and environment issues for national NPR audiences and other national outlets. He previously worked as a managing editor, assistant editor and staff reporter at several major Oklahoma newspapers and studied journalism at the University of Central Oklahoma.

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Gov. Mary Fallin and other lawmakers are pushing to reduce or eliminate Oklahoma personal income tax, which they say would make the state more attractive to businesses.

Eliminating the personal income tax won’t guarantee economic activity, a trio of business professionals told a legislative task force Thursday, the Tulsa World reports.

The Task Force on Comprehensive Tax Reform was told that any effort to eliminate or drastically reduce the state personal income tax should be revenue neutral and should not involve shifting the tax burden elsewhere, such as to business and property taxes.

Ardmore Chamber of Commerce President Wes Stucky told the task force that officials should emphasize “excellence” over tax issues.

Former Oklahoma House Speaker Chris Benge, now the senior vice president for government affairs at the Tulsa Metro Chamber, told the panel that while the argument for lower tax rates “could have some merit,” lawmakers should consider possible effects to core government services.

“If our ability to educate and train employees for a 21st century economy is damaged through lack of funding, if we can’t maintain our roads and bridges, strong health care system, robust research and technology infrastructure, safe streets, etc., then the benefits of a reduction in the income tax rates may be limited.”

The notion that states without personal income taxes — like Texas — have a big competitive advantage in attracting new businesses is largely illusory, former state Treasurer Scott Meacham, now a director of the State Chamber, told the panel, according to the World.

Texas, Meacham said, has much higher property taxes, as well as a business franchise tax that is really a thinly disguised income tax.

Meacham’s remarks didn’t sit well with co-chairs state Sen. Mike Mazzei, R-Tulsa, and state Rep. David Dank, R-Oklahoma City, who have advocated lowering or eliminating the state income tax, wrote World reporter Randy Krehbiel.

Dank suggested energy companies had relocated from to Houston from Oklahoma because top executives didn’t want to pay personal income tax, but Stucky argued that such moves had more to do with “excellence” and Houston being a major oil industry hub, and offered up Devon Energy’s massive office tower construction in Oklahoma City as a rebuttal.