(The Center Square) - Income and corporate tax cuts approved by the Oklahoma legislature last year are expected to cost the state millions in revenue. The new rates went into effect on Jan. 1.
Residents will see a .25% decrease in their income tax and corporations see the rate they pay drop from 6% to 4%. The bill also reinstates the refundability of the earned income tax credit for low-income Oklahomans, which had been removed in 2016.
The income tax cuts would impact the state’s fiscal year 2022 budget by $83.1 million and the fiscal year 2023 budget by $236.7 million, according to the bill’s fiscal note.
HB 2960’s fiscal note indicates the state would forego $53.9 million in fiscal year 2022 and $110.2 million in fiscal year 2023 from the decrease in corporate tax cuts.
The tax cuts received praise and criticism.
“These two actions will make us more competitive with surrounding states and lead to an economically friendly environment for both businesses and citizens,” Oklahoma House Republicans said in a Facebook post.
Gov. Kevin Stitt said the cuts are good for the state, in his New Year’s Day Twitter post.
“Tax cuts kick in today,” Stitt said in the post. “Making Oklahoma a safe haven for business is essential in 2022 and beyond.”
Others said the tax cuts are not enough.
“This tax cut is going to be nothing more than a decent dinner at Chilis,” said Rep. Andy Fugate, D-Del City. told KFOR. “I think it clearly reflects misplaced priorities for the state of Oklahoma.”
The Oklahoma Policy Institute said the tax cuts could hurt the state.
“While the tax cuts appear to be lower than were initially proposed this session, any revenue cut comes with real economic impact to our communities,” according to a statement on the think tank’s website published after the tax cuts were passed by lawmakers. “Economists estimate that every $1 cut from state spending takes $1.50 out of our economy as a result of lost jobs and reduced personal income.”