Governor's race and cutting income taxes

Friday, October 18th 2002, 12:00 am

By: News On 6

Every election year you hear politicians talk about tax reform. Itâ€™s a staple campaign promise. But in this year's race for governor, candidates aren't talking about tax breaks or cuts.

News on Six anchor Scott Thompson says some candidates want to get rid of the state income tax altogether. It's an idea that some say will help you keep more of your money, getting rid of the state income tax and replacing it with a tax on goods and services. Gary Richardson: "Every single state in the nation that's gotten rid of their state income tax has a higher per capita income than Oklahoma does today. Every single state.â€

Steve Largent: "We have to have a tax system that is more pro-growth more pro-business that doesnâ€™t punish you for work and saving and investment as our current one does. Republican candidate Steve Largent says the number one thing businesses look at before moving to a state is its tax structure. And that's why he wants to phase out Oklahoma's income tax.

Steve Largent: "So the basic tax structure that we have in the state of Oklahoma acts as a disincentive for growth and that's what we're experiencing today with budget shortfalls, and why we lose congressional districts. Largent doesn't identify which services will be taxed or how much.

But Gary Richardson says a 1.25% tax on goods and services will reduce the tax burden on working people. Gary Richardson: "If you pay 7% of what you earn that cuts straight across the board you don't spend 7% of what you earn cause you don't get it all so what's best paying 7% of what you earn or 1.25% of what you spend I mean thatâ€™s a no-brainer."

Brad Henry: "The net result of that is a huge tax cut for the wealthiest few Oklahomans on the backs of the rest of us, ordinary Oklahomans working Oklahomans small businesses, it's bad policy.â€ Democratic candidate Brad Henry also says promises of savings are empty. Brad Henry: "If we do that then Oklahomans will immediately be hit with a $330 million federal income tax hike.â€ Thatâ€™s because Oklahomans would no longer be able to deduct their state income taxes on their federal tax returns. Instead of getting rid of the income tax for everyone.

Henry favors giving seniors a break. Brad Henry: "That's a real tax cut for real Oklahomans and its affordable it doesnâ€™t gut education like just elimination of the income tax which is a $2.3-billion hit to our $5.5-billion budget.â€ Both Largent and Richardson say eliminating the state income tax would attract more people and businesses, resulting in more money for the state.

Gary Richardson: "So the point is itâ€™s a healthier program to keep more taxpayers in Oklahoma bring more taxpayers to Oklahoma.â€ Steve Largent: "If we can double our population and hold our state budget level just the opposite of what we've done in the last years then we can actually reduce the overall tax burden on individuals, but actually generator more revenues for the state because you have more working in high paying quality jobs in the state.â€

Income taxes are the state's largest source of income. They accounted for almost half of the Oklahoma's revenue last year.