AP: Gov. Fallin’s Plan Would Phase-Out Income Tax by Wiping Out Popular Deductions

  • Joe Wertz

The final language of Gov. Mary Fallin’s income tax phase-out plan has not made its way into a bill, but details are starting to emerge.

A review of Fallin’s plan by the state Tax Commission, which was obtained by the Associated Press through a state Open Records request, shows that the state would eliminate $888 million in deductions and exemptions.

… including commonly claimed items like mortgage interest and charitable giving, reports the AP.

According to the review, about 61 percent of Oklahoma taxpayers would see a reduction under the plan; about one-third would see their liability increase.

From the AP’s Sean Murphy:

The most-used deductions and exemptions total $750 million, including itemized deductions, personal exemptions and adjustments for Social Security, military pay and retirement income.

Deductions for college savings are gone, too, along with payments made to survivors after military members are killed in action and exemptions for the blind and disabled.

The overwhelming majority of Oklahoma taxpayers claim the $1,000 personal exemption. It’s included on 1.5 million of the state’s 1.64 million tax returns, the AP reports.

The Tax Commission review shows that Oklahomans earning between $30,000 and $40,000 per year would benefit the most.

80 percent of taxpayers in those brackets would see their tax liability reduced, the AP writes.