Budget & Tax

Oklahoma losing high-income earners

December 11, 2024

Curtis Shelton

Net taxpayer migration data from the IRS generally paint a promising picture for Oklahoma. Between 2012 and 2022, Oklahoma gained some 70,000 individuals with a net gain in adjusted gross income of $344 million (with most of those gains coming since 2020). 

We have already looked at how Oklahoma is losing out on taxpayers under the age of 35, but just as concerning is Oklahoma’s loss of high-income earners. As the charts below indicate, since 2012 Oklahoma has lost 158 returns with an AGI of over $200,000. This resulted in a net loss of $652 million in income.

This all means that even as Oklahoma is losing out on new entrants to the workforce, it’s also losing out on those most likely to be hiring. It’s a negative cycle that feeds itself on both ends. If entrepreneurs and business owners are having a hard time hiring in Oklahoma, they are going to start looking elsewhere to base their business. Likewise, if young workers looking to start a career have fewer options in Oklahoma, they are going to move to where the opportunities are.

To reverse this trend, state lawmakers can look at what states are growing the fastest. Consistently, people have been moving to states with lower taxes, specifically income taxes. Florida and Texas are in the top two spots, with Tennessee in fifth place. These are no-income-tax states that not only bring in more people from across the country but specifically people from Oklahoma. Reducing and eliminating the state’s income tax would go a long way toward keeping Oklahoma competitive in an increasingly mobile labor market.