Oklahoma Lawmaker Wants To Eliminate State's Personal Income Tax

Thursday, January 6th 2011, 10:43 pm
By: News 9

Dana Hertneky, News 9

OKLAHOMA CITY, OK -- It's that time of year many dread: tax season. But if one Oklahoma lawmaker gets his way, you won't be shelling out cash to the state anymore.

Representative David Dank is is launching a study into the state's tax system, and wants to entirely eliminate the state's personal income tax.

Rep. Dank is chairman of the House Revenue and Taxation subcommittee. He said his motivation is attracting new business to the state, and eliminating the state sales tax would give Oklahoma a competitive advantage.

"We're going to have to do something drastic to move the state forward," Dank said. "We would be able to recruit more industry, get more productive people in here making money, spending money and it would really be a benefit to our economy."

According to the IRS, there are nine states that currently don't have a state income tax. Dank said they have the competitive advantage when it comes to attracting new companies.

"Out of the nine states that don't have an income tax, seven were among the fastest growing states in the nation in the last census report," he said.

To compensate for the lost revenue, Dank wants to raise the sales tax. That's where his opponents, like Representative Richard Morrisette start to have a problem.

"That's a terrible idea," Morrisette told News 9. "It's like reverse Robin Hood, you take from the poor and give to the upper incomes."

But Dank argues groceries and other essentials would be exempt. Morrisette said the plan still doesn't add up.

"In order to recoup the losses, you would have to increase the sales tax nine or 10 percent," said Morrisette. "That's insane."

Dank said he has support from House leadership but it will likely be the 2012 session before he would be able to make any progress on the proposal.