Fallin tax plan due next week; panel OKs other plans

Fallin tax plan analysis shows 1 in 3 filers would see liability increase

A state government review of Gov. Mary Fallin's proposed income tax plan shows that Oklahoma would do away with $888 million worth of deductions and exemptions — including commonly claimed items like mortgage interest and charitable giving — while simplifying returns and lowering the state's maximum tax rate.

The analysis of Fallin's proposal, conducted by the Oklahoma Tax Commission and obtained by The Associated Press under the state Open Records Act, shows nearly one in three Oklahoma tax filers would see their liability increase.

The most-used deductions and exemptions total $750 million, including itemized deductions, personal exemptions and adjustments for Social Security, military pay and retirement income. The $1,000 personal exemption is claimed on more than 1.5 million of the state's 1.64 million tax returns.

Full story HERE

Fallin plan: List of deduction and exemptions set for elimination

Oklahoma tax deductions and exemptions that would be eliminated under Gov. Mary Fallin's income tax plan, according to a review conducted by the state Tax Commission and obtained by The Associated Press under the Oklahoma Open Records Act.

The table shows the deductions and exemptions to be cut, the number of returns that contain those deductions and exemptions, and the revenue cuts expected.

The proposed cuts total $888 million. Two sets of miscellaneous items were listed due to the reviewers considering deductions and exemptions based on how they are handled on state tax returns.

Deductions, exemptions	No. of returns	Estimated cut
Itemized Deductions	477,400	$474,111,202
Personal Exemption	1,560,400	$132,699,190
Social Security - U.S. taxable	174,600	$90,906,598
Other Retirement Income	195,000	$50,570,967
Okla. Source Capital Gain Ded.	13,300	$47,544,366
Government Pension	77,300	$25,864,740
Military Retirement	27,300	$19,591,701
Civil Service in lieu of Soc. Sec.	22,800	$15,686,055
Net Operating Losses	14,700	$9,513,477
Oil and Gas Depletion	88,800	$8,603,998
Misc., incl. military survivors	5,700	$6,195,967
College Savings	9,900	$2,412,122
Dividend-Interest Exclusion	379,300	$1,691,285
Military Pay Exclusion	18,500	$1,295,034
Age 65 and older exemption	91,900	$474,303
Misc. medical, agriculture, disaster	1,800	$444,331
Adoption Expenses	700	$155,264
Political Contributions	22,800	$138,755
Blind Exemption	5,000	$130,722
Qualifying Disability Deduction	600	$42,682

Related Photos

Oklahoma Gov. Mary Fallin delivers her State of the State address on the floor of the Oklahoma House in Oklahoma City, Monday, Feb. 6, 2012. (AP Photo/Garett Fisbeck)

Discussion

February 21, 2012

By Sean Murphy Associated Press Tue Feb 21, 2012, 10:49 PM CST

OKLAHOMA CITY — A plan to overhaul Oklahoma's income tax structure by reducing the state's maximum tax rate to 3.5 percent and eliminating nearly all deductions and exemptions will go to the Legislature next week, Gov. Mary Fallin said Tuesday.

Fallin said House Speaker Kris Steele will introduce the bill in the House.

A pair of separate proposals to reduce Oklahoma's personal income tax passed a Senate committee Tuesday despite worries that resulting cuts would threaten state services.

Sen. Mike Mazzei, R-Tulsa, introduced a bill to cut the top tax rate from 5.25 percent to 4.75 percent over the next two years and offset the lost revenue by eliminating most tax deductions. His bill also would reduce the corporate income tax rate from 6 percent to 5.5 percent and get rid of Oklahoma's franchise tax.

"As these measures move through the legislative process, lawmakers will have ample opportunity for careful consideration and deliberation," Mazzei said.

Another measure by Sen. Clark Jolley of Edmond would cut the top income tax rate to 2.25 percent next year and phase out the income tax completely by 2022. Named after conservative economist Arthur Laffer, that proposal is projected to have an estimated $1.7 billion fiscal impact on the state budget by tax year 2016.

Democrats on the panel voted against both bills.

"The state income tax is one-third of Oklahoma's revenue stream," said Sen. Tom Ivester, D-Sayre, who voted against both bills. "Our current funding levels for those critical services are already inadequate, especially after several years of cuts because of the recession — ask any teacher, highway patrolman or county health department nurse."

Both measures now head to the Senate floor for a vote.

Text Only

State, national, world

Tropical Storm Beryl makes landfall on Fla. coast
Tropical Storm Beryl has made landfall in northeastern Florida, bringing drenching rains and driving winds to the southeastern U.S. coast, forecasters said.

May 27, 2012 1 Photo
Syria defiantly denies killings; U.N. council meets
Syria on Sunday strongly denied allegations that its forces killed scores of people — including women and children — in one of the deadliest days of the country’s uprising, and the U.N. Security Council held an emergency session on the massacre.

May 27, 2012 1 Photo
NATO disputes report of casualties in airstrike
The U.S.-led coalition on Sunday disputed reports that eight civilians, including children, were killed in a NATO airstrike in a remote part of eastern Afghanistan.

May 27, 2012 1 Photo
Oklahoma woman recalls deadly 2002 bridge collapse
She recalls a van disappearing in front of her and her evangelist husband, Max, the sensation of flying and the heat of a deployed air bag. Beyond that, it all kind of runs together.

May 26, 2012 1 Photo
Florida police kill naked man chewing on face
Witnesses said that a woman saw two men fighting and flagged down a police officer, who came upon a naked man mauling the other man.

May 26, 2012 1 Photo
Dozens of children killed in new Syria attack
Gruesome video Saturday showed rows of dead Syrian children lying in a mosque in bloody shorts and T-shirts with gaping head wounds, haunting images of what activists called one of the deadliest regime attacks yet in Syria’s 14-month-old uprising.

May 26, 2012 1 Photo
Vatican in chaos after butler arrested for leaks
An already-sordid scandal over leaked Vatican documents took a Hollywood-like turn Saturday with confirmation that the pope’s own butler had been arrested after documents he had no business having were found in his Vatican City apartment.

May 26, 2012 1 Photo
Astronauts enter world's first private supply spacecraft
Space station astronauts floated into the Dragon on Saturday, a day after its heralded arrival as the world’s first commercial supply ship.

May 26, 2012
Court: Electric cars eligible for tax credit
The Oklahoma Court of Civil Appeals on Friday overturned a state Tax Commission ruling certain electric cars were not eligible for a state tax credit.

May 26, 2012 1 Photo
Notorious missing child case finally gets an arrest
Police said Hernandez told a relative and others, as far back as 1981, that he had “done something bad” and killed an unnamed child in New York City.

May 25, 2012 2 Photos
More State, national, world Headlines

State, national, world

Search Results

Fallin tax plan analysis shows 1 in 3 filers would see liability increase

Fallin plan: List of deduction and exemptions set for elimination

Related Photos

Discussion

Fallin tax plan due next week; panel OKs other plans

Site Map

Contact Us