Oklahoma - Republican speaker, senators make proposals

The Shawnee News-Star

OKLAHOMA CITY (AP) -- House Speaker Todd Hiett on Wednesday announced a $325 million tax cut plan that would lower the state income tax, eliminate the estate tax and provide a state child care income tax credit for stay-at-home parents.
The income tax reduction would be fourth-tenths of a percent, reducing the maximum rate from 6.25 percent to 5.85 percent. That would cost $130 million.

Earlier, Sen. Scott Pruitt, R-Broken Arrow, held a news conference to trumpet his plan to cut the state's maximum income tax rate to 4.9 percent, a $481 million reduction.

Hiett said he would like to see the tax rate eventually drop to 3 percent and would support a higher cut if it made it out of the Democrat-controlled Senate.

Meanwhile, Democrats traveled to Durant to announce a plan they said would mainly help middle-income taxpayers.

A back-to-school sales tax holiday was among the proposals announced by Sen. Jay Paul Gumm, D-Durant, chairman of the Senate Finance Committee. It would cost something less than $6 million, according to the Oklahoma Tax Commission.

Democrats also proposed a tax credit of up to $1,200 to help families who buy health insurance for their children and raising the income eligibility for college scholarships from $50,000 to $75,000. The health insurance tax credits would cost about $54 million. Figures were unavailable for the college scholarship program.
The speaker's estate tax plan would cost $85 million and the child care credit would cost $20 million.

This year, the exemption from estate taxes in Oklahoma climbs to $1 million but the tax still endangers family farms and businesses, said Rep. Kevin Calvey, R-Del City, chairman of the House Revenue and Taxation Committee.

Hiett said the state needed to make the tax cuts while the economy is booming to ensure that the state can continue to grow and produce revenue through new jobs created by businesses locating in the state.

"We're punishing our state's hardest workers with our high income tax rate," he said. "And we're driving away the investment and opportunity we need to make Oklahoma grow."
Hiett called the estate tax a "death tax" that is "a black eye on our state and it hurts our chances to attract and keep good jobs. We cannot pass this tax on to future generations. We must end it this year."

The child care tax credit for stay-at-home parents would be similar to the one now in place where both parents work outside the home.
"We should be encouraging parents who want to stay at home with children," Hiett said. "It makes no sense and is unfair to exclude state-at-home parents from tax credits for child care."
Pruitt said the state can afford his larger income tax proposal, which he said would restrain government spending and help the economy by increasing consumer spending.

"If you're a family of four making $40,000 a year, this tax relief will mean you get to keep $400 more of your own money," he said.
Pruitt and Hiett are among the Republicans running for lieutenant governor this year.