(The Center Square) – The income and corporate tax cuts approved by the Oklahoma legislature last year are expected to cost the state millions of dollars. The new rates went into effect on January 1.
Residents will see their income tax cut by 0.25%, and corporations will see the rate they pay drop from 6% to 4%. The bill also reinstates the earned income tax credit refund for low-income Oklahoma residents, which was removed in 2016.
The income tax cuts would have an impact of $ 83.1 million on the state’s fiscal year 2022 budget and $ 236.7 million on the fiscal year 2023 budget, according to the project. of law. tax note.
HB 2960’s tax note indicates that the state would forgo $ 53.9 million in fiscal 2022 and $ 110.2 million in fiscal 2023 from reduced corporate tax cuts.
The tax cuts have received praise and criticism.
“These two actions will make us more competitive with neighboring states and lead to an economically favorable environment for both businesses and citizens,” Oklahoma House Republicans said in a Facebook post.
Gov. Kevin Stitt said the cuts were good for the state in his New Years Twitter post.
“The tax cuts take effect today,” Stitt said in the post. “Making Oklahoma a safe haven for businesses is essential in 2022 and beyond. “
Others have said that tax cuts are not enough.
“This tax cut will be nothing more than a decent dinner at Chilis,” said Representative Andy Fugate, D-Del City. told KFOR. “I think this clearly reflects misplaced priorities for the state of Oklahoma.”
The Oklahoma Policy Institute said the tax cuts could hurt the state.
“Although the tax cuts appear to be lower than those initially offered this session, any reduction in income has a real economic impact on our communities,” according to one declaration on the think tank’s website published after the tax cuts were passed by lawmakers. “Economists estimate that every $ 1 cut in government spending takes $ 1.50 from our economy due to lost jobs and reduced personal income.”