Monday, September 08, 2008

Tax Cuts Create Reasons for HOPE Petition

During the early 1990's, common education received 39% of the state budget. Now common education is funded at 35%. Had the percentage remained at 39%, Oklahoma would not be under-investing in its kids. The HOPE Initiative wouldn't be needed. However, tax cuts have eliminated much of the growth revenue in our state and you can read about the results those cuts have had on Oklahoma's services.

OKLAHOMA'S INCOME TAX CUTS: Revenue Collections Dampened by $400 - $600 Million; Benefits of Top Rate Cut Go Primarily to Wealthiest

Cuts to the individual income tax have decreased state revenues by several hundred million dollars, with most of the benefits going to the highest-income Oklahomans, according to a pair of new fact sheets from Oklahoma Policy Institute.

The first fact sheet calculates that, if not for the tax cuts enacted between 2004 and 2006, the state would have collected $400 million to $600 million more in revenues last year than it actually did. This revenue could have been invested to meet our urgent priorities as a state.

The second fact sheet reveals that when fully phased in, the wealthiest fifth of households will receive 73 percent of the benefit from lowering the top income tax rate, totaling $423 million. By contrast, the bottom 40 percent of households will receive only 3 percent of the benefit from cutting the top rate, totaling $17 million. Tax cuts going to the wealthiest 1 percent of households alone ($169 million) are the rough equivalent of the cost of a $1,500 salary increase for every teacher in the state, a 3 percent cost-of-living adjustment for state employees, and additional staff for our child welfare system and correctional facilities.

Matt Guillory, executive director of Oklahoma Policy Institute, stated that, "During this time of robust economic growth in our state, it is unfortunate that decisions made in recent years have squandered what could have been a real opportunity to create a better educated, healthier and more economically competitive state."

Click here to link to the two fact sheets; or click here to view OK Policy's full press release.

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