OKLAHOMA CITY (AP) — Senate leaders are unveiling a revenue-neutral plan to slash the income tax by one-half of 1 percent over the next two years and pay for the cuts by eliminating and modifying numerous tax breaks and exemptions.
Flanked by the entire GOP caucus, Senate President Pro Tem Brian Bingman described the plan on Tuesday as "very responsible."
Bingman's key negotiator on tax changes, Senator Mike Mazzei, criticized a separate proposal by the House as one that would leave a "gaping hole" in next year's budget.
The Senate plan would reduce the top income tax rate from 5.25 percent to 5 percent, beginning next year. It would further reduce the top rate to 4.75 percent in 2014.
The governor's Secretary of Finance, Preston Doerflinger, says tax cut negotiations are ongoing.
WHAT CHANGES WOULD BE MADE TO THE TAX CODE?
Retained:
• Preferences for retirees and active duty military personnel;
• Standard and itemized deductions;
• Treatment of net operating losses;
• Capital gains deduction;
• Volunteer firefighter credit;
• Nonrecurring adoption expense deduction; and
• Tornado property damage credit.
Modified:
• Personal exemption allowed only for those under specified income thresholds ($35,000 for single filers and $70,000 for joint filers);
• Grocery sales tax relief allowed, but no longer refundable;
• Transferable credits made refundable, value reduced by 20% and sunset applied as applicable;
• Value of preference reduced by 20% for Film Rebate program, donations to scholarship organizations, CNG investment credits and the investment/new jobs credit; and
• Child/child care credit eligibility changed from income of $100,000 to $50,000.
Eliminated:
• Over 30 tax preferences available to businesses; and
• Some preferences available to individuals including: low income property tax credit and state earned income tax credit.