Number of middle-class tax filers growing

January 31, 2012

A mantra from self-described “progressives” in Oklahoma is that the middle class is shrinking and “the rich” don’t pay their fair share of taxes. Despite this exercise in the politics of envy, the Oklahoma Comprehensive Annual Financial Report (CAFR) tells a different story. The CAFR is the primary means of reporting the state government’s financial activities, and was completed by the Office of State Finance (OSF) for public review on December 30, 2011.

Data regarding personal income tax filers for 2000 and 2009 is presented on page 167 of the FY-2011 CAFR. Here are some noteworthy highlights:

• The number of tax filers with adjusted gross income over $50,000 (a year) has increased by 139,298—or 39.91 percent—from 2000 to 2009.

• The number of tax filers with adjusted gross income of $25,000 or less (a year) has decreased by 34,419—or -4.38 percent—from 2000 to 2009.

• 46 percent of tax filers in Oklahoma (adjusted gross income of $25,000 or less) pay 5 percent of the total personal income tax liability, with an average liability of $133.

• 71 percent of tax filers in Oklahoma (adjusted gross income of $50,000 or less) pay 21 percent of the total personal income tax liability, with an average liability of $427.

• 29 percent of tax filers in Oklahoma (adjusted gross income of more than $50,000) pay 79 percent of the total personal income tax liability, with an average liability of $3,913.

These data are particularly noteworthy when one considers that policies such as Right to Work, repeal of Oklahoma death (estate) taxes, and personal income tax rate reductions of nearly 20 percent were enacted in Oklahoma during this same period. Let’s hope policymakers in Oklahoma continue to ignore the “progressives,” who opposed all this progress, and decide to pursue the complete phaseout of the state’s personal income tax.