So for brevity’s sake, let’s say that Oklahoma has $1 billion of income tax revenue that is replaced by some other nondeductible revenue. Further, let’s assume that 30 percent of all income is by lower income workers who do not itemize. Finally, say that the average federal rate for that upper 70 percent is 25 percent. That means that federal income taxes for Oklahomans would rise by $175 million with the phaseout of income tax.
The author would be better served to look at the opposite alternative. Eliminating $1 billion in sales taxes and replacing these with deductible taxes would result (using similar methods and assumptions) in $175 million in reduced federal payments by us in the upper income brackets.
Perhaps as a certified public accountant, the author could tell how much economic impact a fresh $175 million would do for the economy. Those of us in upper income brackets should be looking at policies of entities such as the Oklahoma Council of Public Affairs and wonder whose interests they are serving. It is certainly not those of people of wealth.
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