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State/Region

February 11, 2013

Critics, taxpayers hesitant over proposed tax cut

OKLAHOMA CITY — To the typical Oklahoman, an income tax cut proposed by Gov. Mary Fallin and embraced by legislators won’t mean much to the bottom line.

If enacted as the governor set forth in her State of the State address last week, the average taxpayer would save about $80 a year, according to the state’s revenue office. That’s a little over $6 a month — enough for one-and-a-half gallons of gas or two gallons of milk or most of Netflix subscriptions.

“I guess it could buy me another coffee,” Niki Palmer said with a laugh at Coffee Slingers in downtown Oklahoma City. At her income, Palmer, the 26-year-old airman at Tinker Air Force Base would get back less than the average per year: $14, or three coffees.

But the governor and Republican legislators want Oklahomans to consider the bigger picture. They say lower taxes can “grow” the economy by encouraging investments and allowing businesses to hire more people.

“This decision is an economic growth decision as well,” said Finance and Revenue Secretary Preston Doerflinger, the governor’s chief budget negotiator.

Fallin has proposed cutting Oklahoma’s highest tax rate — on taxable incomes above $8,700 — from 5.25 percent to 5 percent, starting Jan. 1, 2014. When fully implemented, the cut would cost the state $120 million in revenue, according to the Oklahoma Tax Commission.

John Estus, the director of public affairs for the Office of Management and Enterprise Services, which tracks state budgets and revenues, said the tax cut would have no impact on about 40 percent of the state’s taxpayers.

“If it could do more for, let’s say, the lower class, then it’d be worth it,” said Robin Pena, who with her husband, Javier, an electrician, would get back less than $50 in 2014 with the tax cut. Their insurance recently jumped by $20 per week, she said, and with five children, $6 a month would be less than a dollar per person.

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