Oklahoma Flat Tax Bill: What lawmakers are saying

A bill aiming to change the tax code is making its way through the legislature.

Senate Bill 304 would establish a flat 4.75% individual income tax rate instead of the tiered system currently in place.

The bill's author says this is a compromise between the governor's goal of eliminating the income tax. Lawmakers opposed to the bill are worried the lost revenue could lead to budget cuts.

Q: What does the bill do?

State Senator and Tulsa Republican Dave Rader says he's tired of what he calls Oklahoma's complicated tax structure. That's a big part of why he authored Senate Bill 304.

"If you and I were setting up how to do taxes, we wouldn't set up the way we do taxes. This is over 100 years old," said Rader.

The legislation would create a 4.75% tax on all income and adjust the standard deduction.

Q: What would be the impact?

Sen. Rader estimates his bill would save Oklahoma taxpayers about $120 million.

Tulsa Democrat and State Representative John Waldron sees it differently. He sees $120 million as lost state revenue. "Let's show how we're going to pay for things before we get we make some fancy tax cuts," said Waldron.

Q: How could the state recoup the lost revenue?

Rader says expanding the sales tax could make up for that lost revenue down the line, but without it being included in this legislation, Rep. Waldron is voting no. "I think we have to have our fiscal house in order before we start experimenting with the finances," said Waldron.

State lawmakers cut the state's sales tax on groceries last year, taking millions out of the state budget.

Q: What's next for the legislation?

The bill has passed in the State Senate. It now heads to the House.

State lawmakers and the governor are still working on a budget, in addition to this tax plan.