OPINION/COLUMN
There’s an adage that working Oklahomans understand, but big-government proponents do not: If you want less of something, tax it more.
The income tax, at its core, is a penalty on work and investment. Therefore, the higher the income tax, the more work and investment is deterred.
Conversely, the lower the income-tax rate, the more likely people are to work and invest in Oklahoma.
Oklahoma finished the 2026 budget year, which ended June 30, with rising tax collections despite more than $1 billion in tax reductions during the two terms Kevin Stitt has served as governor.
State General Revenue Fund collections for fiscal year 2026 totaled $8.9 billion, which was $142.4 million more than the amount collected a year prior.
During Stitt’s tenure, several taxes have been cut, but the most important for economic growth has been the reduction in the personal income tax, which has been lowered from 5 percent to 4.5 percent. The state has also adopted a plan to automatically reduce the income tax by another quarter-point every year revenue growth comes in above a certain rate.
Some argue income-tax cuts “cost” the state money.
In reality, that is not the case. Between June 2025 and June 2026, Oklahoma’s personal income-tax collections grew by more than $80 million.
Tax-cut opponents will dismiss that reality, attributing income-tax collection increases to Oklahoma’s growing population. But that’s a feature, not a bug, of lower tax rates. States with lower income taxes are more attractive to movers than states with higher income taxes.
Since 2020, Oklahoma has routinely ranked among the top 10 to top 15 states attracting movers. As Oklahoma taxes have fallen, more people have moved here.
Other states have taken a different approach and either hiked existing income taxes or maintained tax rates that are substantially higher than Oklahoma’s rates. Those states are, by and large, losing population.
Again, that’s no coincidence.
As Stitt noted, “This is exactly what happens when you cut taxes, trust Oklahoma families and businesses, and keep government accountable.
Oklahoma’s economy is strong, our revenues are up, and we’re proving year after year that conservative leadership works.”
While the trends in Oklahoma are encouraging, we cannot stand pat.
Since 2022, officials in neighboring Arkansas have lowered their income tax from 5.5 percent to 3.9 percent. Arkansas’ growth has been strong.
Neighboring Texas has long benefited from having no personal income tax and has been among the top states for economic growth for years.
So long as we make Oklahoma a place where earned success can reap the benefits of labor and job seekers can find employment, we will thrive. But that will only happen so long as we maximize earned success, rather than maximize state government’s claim on workers’ pay.
Jonathan Small serves as president of the Oklahoma Council of Public Affairs (www.ocpathink.org).
