State Sen. Roger Thompson is calling his just-concluded study on Oklahoma’s tax code a success. The second of two meetings, featuring in-depth presentations on state taxes, exemptions, credits and spending, concluded Wednesday with eighteen members of the Senate attending the final hearing. Thompson, chair of the Senate Appropriations Subcommittee on Finance, organized the hearings.
“You can’t reform what you don’t understand—that’s why these meetings were so important,” said Thompson, R-Okemah. “It’s an extremely complex issue, but ultimately it affects every single person in Oklahoma. These hearings were comprehensive, and included research gathered over the past two decades. We didn’t need to reinvent the wheel—but now it’s time to get that wheel rolling.”
Thompson noted that Oklahoma’s current sales tax exemptions are in excess of $6 billion a year. Various tax credits cost the state more than $250 million. But he said the amount of credits claimed, though not taken represent a potential liability of several hundred million dollars more.
Thompson said the next step will be an interim study on reforming Oklahoma’s tax code.
“We must be able to provide adequate resources for our most fundamental services, but instead of raising taxes, we need to broaden the tax base—doing that will provide the resources we need and we could even lower the overall tax rate,” Thompson said.
As part of his work on several national committees examining taxes and revenue, Thompson said a major issue for states like Oklahoma is the failure to adapt to significant economic shifts and other changes over the decades.
“In the early 1950’s, 67 percent of goods sold were taxed. Today it’s just 32 percent—less than half. Yet here in Oklahoma, our population has grown by half a million people,” Thompson said. “Modernizing our tax code and broadening the tax base will enable us to stabilize our budget and better fund our schools, health and mental health, public safety, and better address other critical needs.”