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Bill Aims to Simplify Income Tax in Oklahoma

Updated: Apr 26, 2023

You've crunched the numbers and rounded up the receipts. The deadline to file those pesky income taxes has arrived.

Oklahoma's income tax is unnecessarily complicated. Because of our graduated, six-bracket income tax, each segment of your income is taxed at a different rate. Calculating the total amount owed requires a multi-step math problem or a confusing table from the Oklahoma Tax Commission (no joke, the OTC’s official instructions for calculating income tax liability are 20 pages long!).

The legislature is considering a bill, House Bill 2285, that adopts our recommendation to simplify the individual income tax by moving to a single rate. The bill would:

  • Consolidate six tax brackets into one single bracket—all income would be taxed at the same rate (4.5 percent);

  • Increase the standard deduction to ensure low-income filers to not see a tax increase;

  • Remove the marriage penalty built into the current six brackets; and

  • Establish fiscally responsible revenue triggers that enable additional future rate cuts, but only if the state has enough revenue to fund existing programs and services.

Moving to a single-bracket income tax is a no-cost proposition for policymakers, but it would make life a little easier for taxpayers and would move our tax system in a more economically competitive direction.

Here’s to a tax table-free April of 2024, hopefully the first year Oklahomans won’t need 20 pages of instructions to accurately calculate how much they owe in taxes!


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