Gov. Kevin Stitt is continuing his push to gradually phase out Oklahoma’s tax on work and investment, the personal income tax, noting that other states are slashing their income-tax rates and threatening to leave Oklahoma behind.

“If we do not cut taxes and stay up with our competition,” Stitt said, “we’re going to be an outlier when it comes to tax policy.”

He noted that taxes are one of the factors considered by businesses before expanding into state markets. And Oklahoma’s current top rate of 4.75 percent is now one of the higher income-tax rates in the region, and substantially higher than the rate in many other states around the nation.

 “Mississippi is on a path to zero,” Stitt said, referencing recent activity in that state.

Mississippi’s current income-tax rate of 4.7 percent, already lower than Oklahoma’s top rate, is now scheduled to fall to 4 percent next year and then 3 percent in 2027. After that, the Mississippi rate will be cut another three-tenths of a point each year until the tax is fully repealed.

Stitt noted Mississippi is not the only state moving aggressively on taxes.

In the immediate region, Texas has no personal income tax. Arkansas has lowered its rate to 3.9 percent. Colorado’s rate is 4.4 percent. And officials in Kansas have voted to begin gradually reducing their personal income-tax rate to 4 percent.

Assuming the Kansas cuts take effect as planned, that will mean only one state bordering Oklahoma—New Mexico—will have a higher personal income tax rate than Oklahoma if state officials do not change Oklahoma’s rate before then.

And, Stitt noted, Oklahoma is competing with other states around the country.

Officials in South Carolina have cut that state’s tax rate from 6.2 percent to 3 percent, he said. Iowa is at 3.8 percent and Nebraska is on the path to a 3.99-percent rate. Florida and Wyoming have no personal income tax.

“I don’t want to be left behind as other states continue to move this needle,” Stitt said.

Members of the Oklahoma House of Representatives have advanced legislation that would gradually eliminate Oklahoma’s tax on work and investment.

House Bill 1539, by state Rep. Mark Lepak, R-Claremore, would cut Oklahoma’s 4.75-percent personal income-tax rate by a quarter point each time that net state revenue increases by at least $300 million, continuing the process until the tax is completely repealed.

The bill now awaits action in the Oklahoma Senate.

Stitt is among those supporting a phase-out of Oklahoma’s personal income tax.

“I’m not saying we’re going to do it overnight,” Stitt said. “But I’m saying you’re just going to do a little bit each year.”

Stitt noted polling shows that 67 percent of Oklahoma voters support eliminating the state income tax, including 81 percent of Republicans.

And, the governor said, the history of the past two decades shows that income-tax reductions translate into strong state economic growth that ultimately fuels state tax collections as well.

He noted Oklahoma’s income tax was as high as 7 percent in the 1990s, compared to the current top rate of 4.75 percent. The governor pointed to a chart showing the trajectory of tax collections during that period. As the income tax rate fell, he noted, tax collections increased.

“Every time that, historically, we have cut taxes,” Stitt said, “revenue expands.”