Cargill Sets GOP Tax Policy Goals

Legislation that will further cut the state’s income tax and give first-time home buyers a tax-free savings account are among the tax policy goals House Speaker Lance Cargill and GOP leaders will be supporting this session.

In a press roundtable Wednesday, Cargill unveiled his American Dream Act, which will allow first-time home buyers to save money tax-free to go toward a down payment on a home. The legislation will encourage responsible savings as people move toward home ownership.

“Oklahoma has been mostly insulated from the housing crunch seen across the country, but we need to do more to help Oklahomans save up for a down payment so they aren’t forced into risky loans they cannot afford,” said Cargill.

He also unveiled plans to ask for slightly more than a quarter percent cut in the income tax this year, but will do so in a way that it will not have a financial impact on the 2009 fiscal year budget.

In order to do that, Cargill and House fiscal staff will be looking through the over 480 special interest tax credits and finding ones that can be eliminated. The cost of cutting the income tax will be offset by the amount saved in the eliminated tax credits for special interests.

“Tax cuts should be for all Oklahomans, not a select few,” said Cargill.

Oklahoma’s Rainy Day fund totals $575 million, the largest in the country as a percentage of the state budget. Overall taxes paid to the state by taxpayers are also estimated to grow by at least $200 million this year.

“With a large savings account and significant growth revenue, taxpayers deserve a break,” Cargill said. “Many politicians this year have moved spending to the front of the line and have opposed additional tax cuts. But, we made a commitment to the people of Oklahoma to reduce their income taxes, and we intend to keep that promise.”

The income tax currently sits at 5.5 percent, and was supposed to drop to 5.25 percent in 2009 if state revenues increased at least 4 percent.

But, last month the state Board of Equalization certified that there is not enough growth revenue to trigger the tax cuts. That tax cut will remain on the books though, and will be implemented with some changes to the language in 2010 if state revenues hit the 4 percent trigger, Cargill said.

Coupled with the new tax cut proposed this year, that would bring the state income tax below 5 percent by 2010.

“House Republicans have made record investments in our state’s roads and bridges and education system since we took over the majority in 2005,” said House Revenue and Taxation Chairman Randy Terrill. “But we also want to see a portion returned to the Oklahomans who footed the bill.”

Cargill also wants to set a long-term vision for the state’s tax policy. Political leaders in this state have been quick to embrace plenty of long term spending plans, but less so when it comes to tax policy. Reducing the tax burden on our state’s senior citizens should be a target the brightest fiscal minds in Oklahoma examine as a future goal, he said.

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