Laffer Likes OK Income Tax Phase-Out Plan
A well-known economist is endorsing a proposal for a 10-year phase-out of Oklahoma’s personal income tax.
Arthur Laffer, of Laffer Curve fame, said a proposal and study by the Oklahoma Council of Public Affairs and Arduin, Laffer & Moore Econometrics would “put Oklahoma’s competitive economy into a top-tier economic policy environment,” reported The Oklahoman’s Michael McNutt.
“It’ll lead to a lot faster growth for Oklahoma. You’ve been a very good performing state, … but you still have a way to go to be really superb,” Laffer said after speaking to a joint meeting of the downtown Oklahoma City Lions, Kiwanis and Rotary clubs. “Your income tax is your primary deterrent to further economic growth.”
The individual income tax comprises roughly one-third of state tax revenues. Opponents, including several university economists, say that abolishing the income tax could have severe fiscal consequences and could lead to increases in sales and property taxes.
Gov. Mary Fallin and other lawmakers say eliminating the income tax would help Oklahoma attract and retain jobs, a perspective underscored by Laffer and the OCPA/ALME study.
From The Oklahoman:
Laffer, who played a key role in writing Proposition 13, the California property tax cap initiative, said Oklahoma officials would see more interest by businesses if the state eventually eliminated personal income tax.
The study and proposal was met with tacit approval from the Governor’s Office. Patrick B. McGuigan of CapitolBeatOK, which is supported and contracted by the OCPA, reported:
Preston Doerflinger, Cabinet Secretary of Finance in the administration of Governor Mary Fallin, told CapitolBeatOK he has studied the OCPA-ALME paper. Asked for a succinct reaction, he said, “Let’s get it on.”