Details on Fallin’s income tax reforms will come on Monday
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Published: 03-Feb-2012

There is an old expression in life, politics and public policy – “the devil’s in the details.” While the words might seem trite or overused, they were repeated frequently in the halls of the state Capitol late this week.

The time-worn observation has the benefit of sometimes being true. It was heard often from seasoned observers of Oklahoma state government in the first 24 hours after Gov. Mary Fallin announced she wanted to fashion a “game-changing moment” with income tax reform (and accompanying limits on tax credits and business incentives).

Fallin says her proposal will be “one of the boldest tax reforms in the country.”
 
At the annual Associated Press legislative briefing, Gov. Fallin told Capitol reporters the reforms will be detailed in her executive budget and next Monday’s State of the State address. 

While many substantive issues, including water policy, were discussed at the briefing, the income tax proposal will have the greatest implications for budgeting and economic policy. 

In a follow-up intended to clarify her comments, CapitolBeatOK asked Fallin if the use of a "trigger" mechanism in the income tax proposal will mean that steady income tax reduction will be significantly slowed, or that the elimination of the income tax for which the governor has expressed sympathy might never come. 

Her spokesman, Alex Weintz, replied in an email, saying, “We think we’ve identified a realistic trigger mechanism that sets the state on a course for income tax elimination.
 
“So, to answer your question, yes it is possible we will not see a reduction every year. But no, we do not expect that growth trigger to prevent a 0% income tax level from ever being reached. Also, remember that a significant tax cut will take place Jan 1, 2013 without a growth trigger.”

In her comments Thursday, Fallin said she will press legislators to enact “a fairer, flatter and simpler” income tax system.  Fallin intends for her plan to have “immediate and significant” impact.

The proposal to close tax loopholes and provide a specific list of recommended tax credits to limit or eliminate will be, she said, part of a plan designed “eventually to eliminate the state income tax.”

She said modernization steps that are saving millions of dollars would also contribute to a revenue pool to start the tax reductions. In response to reporter’s questions seeking some greater clarity, Weintz good-naturedly reflected, “That’s a Monday afternoon question.” 
 
She did not disclose in Thursday’s briefing how long an income tax phase out process might run, but said her proposal would include a “growth trigger” tied to the state’s economic growth.

Use of the words “eventually” and “trigger” triggered CapitolBeatOK’s follow-ups. 

 
Stayed tuned, for more news.

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