Oklahoma’s income tax deserves long, hard look

Muskogee (Okla.) Phoenix: Gov. Mary Fallin said recently at a town hall meeting her long-term goal is to eliminate Oklahoma’s income tax and restructure the state’s tax system to find new ways to pay for essential public services.

She has no immediate plans to propose cuts. But members of a tax reform committee are studying changes to the tax system, including elimination of the income tax.

Taxes obviously would have to be raised in other areas to compensate.

Five of the six continental states that have no state income tax derive at least 40 percent of their revenue from sales tax, with four of those states getting at least 50 percent via sales tax.

Personal and corporate income taxes account for about a third of the state’s $6.2 billion in revenue. We find it hard to believe the state could stand to lose more than $2 billion from its budget.

Needless to say, a significant hike in sales tax likely would have to occur to offset that loss.

Sales tax presently accounts for 27.8 percent of Oklahoma’s revenue.

This isn’t the first time a state governor has wanted to kill the state income tax — former Gov. Frank Keating proposed it toward the end of his time in office.

Eliminating the sales tax may not be practical, but it worth a hard look.