Policy Documents

Oklahoma’s History With Income Tax Cuts: A Story of Growth

August 1, 2013

In this OCPA memorandum, the unsigned authors argue that from 2004 through 2009, Oklahoma’s personal income tax was lowered more than 20 percent. Over this period of time, the top marginal rate dropped, in a series of four reductions, from 7.00 percent to 5.50 percent. With each drop in the rate, many individuals and organizations in favor of higher government spending worked against the income tax cuts. They claimed income tax cuts would result in less revenue for state government programs. What actually transpired was that Oklahoma saw an increase, both in economic activity and tax revenues, with each of the income tax cuts implemented between 2004 and 2009. Beginning in 2009, Oklahoma did see revenue declines in connection with the national recession, but a stronger reliance on sales tax revenues—due to income tax cuts—helped stabilize revenues compared with many other states.