Fair Taxation?

Oklahoma’s middle-income families pay between nine and 10 percent of their overall income in taxes compared to the state’s wealthiest families, which pay only 5.5 percent, according to a new study.

According to the Oklahoma Policy Institute, which issued a statement about the study, some taxes fall “disproportionately” on low-income families.

The study found that the state's sales, excise and property taxes, which fall disproportionately on the lowest income families, are the primary cause of low- and middle- income households paying a higher proportion of their income in taxes. Overall, the report found that families with incomes under $50,000 pay between nine and 10 percent of their incomes in state and local taxes, while families with income over $400,000 pay just over 5.5 percent.

The Institute on Taxation and Economic Policy conducted the study. According to the study’s introduction:

The study’s main finding is that nearly every state and local tax system takes a much greater share of income from middle- and low-income families than from the wealthy. That is, when all state and local income, sales, excise and property taxes are added up, most state tax systems are regressive.

The study cited Oklahoma’s sales tax on groceries as one reason for its regressive tax structure.

The bottom line is that Oklahoma needs a fairer tax structure. Recent state income tax cuts have primarily benefited the state’s wealthiest families while middle- and low-income families—those making $50,000 or less—face stagnant wages, job losses and rising health care costs.

It’s unlikely the state’s Republican-dominated legislature, which also has many conservative Democrats, will make any significant changes to the state’s tax structure anytime soon. The state currently faces a major budget crisis, and it’s doubtful fairer taxation is a priority issue for the current legislative leadership.