Oklahoma has spent three decades cutting its income tax. Eliminating it has proved to be a much different challenge.
By Tim Allen, Managing Editor
Oklahoma has been debating the income tax for a generation.
Governors have changed. Legislatures have changed. The state’s economy has weathered oil booms, recessions, budget crises and a pandemic. Through it all, Oklahoma policymakers have steadily lowered the top individual income tax rate from 7% in the early 1990s to 4.5% today.
The accompanying chart tells a story that may come as a surprise. Governors of both parties approved income tax reductions. Ironically, the largest cumulative reductions occurred during Democratic Gov. Brad Henry’s administration, when strong state revenues allowed lawmakers to reduce the top rate from 6.65% to 5.5%.
Before Governor Kevin Stitt, Republican governors Frank Keating and Mary Fallin also called for eliminating the individual income tax. Both approved rate reductions, but neither reached zero.
The debate today isn’t whether Oklahoma policymakers have cut taxes. They have. The question is whether Oklahoma can eliminate one of its largest ongoing sources of state revenue without fundamentally changing how state government is financed.
That question has become central to the Republican runoff for governor.
Former state Sen. Mike Mazzei has proposed eliminating Oklahoma’s individual income tax over six years while also expanding property tax relief for seniors and veterans. Attorney General Gentner Drummond also supports reducing taxes but argues the state should first identify replacement revenue before permanently giving up billions of dollars in annual collections.
The goal of eventually eliminating the income tax is not new, and it is already reflected in state law. Legislation enacted in 2025 reduced the top rate to 4.5% beginning in 2026 and established a path for additional quarter-point reductions when revenue conditions and other safeguards are met.
Mazzei’s proposal differs primarily in its speed and certainty. It sets a six-year timetable and relies on some presently undefined combination of budget reductions, economic growth and other changes to offset the lost revenue rather than making each reduction dependent on the state meeting fiscal safeguards.
The difference between those approaches reflects two different definitions of conservative governance. One defines conservatism by reducing the size and cost of government, using lower revenue to impose discipline and force spending decisions. The other puts greater emphasis on meeting existing obligations, reducing taxes only as spending falls or sufficient revenue remains available to pay the state’s bills.
Both envision a smaller tax burden. They disagree over whether government should first be compelled to live with less revenue or demonstrate that it can absorb the reduction before the money is surrendered.
History offers useful perspective. Every governor since Frank Keating has left office with a lower top income tax rate than the one inherited. Yet none eliminated the tax altogether. Every administration eventually confronted the same governing reality: recurring expenses require recurring revenue.
Perhaps the clearest example came in 2018.
After years of structural budget shortfalls, declining energy revenue and repeated agency reductions, Oklahoma faced a fiscal crisis that culminated in a statewide teacher walkout. Gov. Mary Fallin signed what was then the largest recurring revenue package in state history. Lawmakers raised cigarette, motor fuel and gross production taxes and limited some deductions, but they did not raise the income-tax rates they had spent years cutting.
The package illustrates the unusual political status of Oklahoma’s individual income tax. When the state needed more recurring revenue, policymakers raised it elsewhere. The historical record does not settle whether Oklahoma should eliminate the income tax, but it does show that the state has protected previous rate reductions even when fiscal pressure forced it to find additional revenue.
That is why the conversation should not end with the promise. It should begin with the plan.
If Oklahoma eliminates billions of dollars in recurring income-tax revenue, voters deserve to know how the difference will be closed. How much can be achieved through budget reductions? What services or programs would change? Would economic growth or another revenue source be needed to cover the rest?
Those are governing questions, not campaign slogans. Talk of eliminating taxes tickles the ears, but getting there requires tradeoffs, assumptions and numbers that do not fit neatly into a campaign speech or television commercial.
For 35 years, Oklahoma policymakers have moved the state closer to eliminating the income tax. Each reduction reflected the fiscal and political circumstances of its time. The next governor may ultimately succeed where others did not, but the larger the promise, the greater the obligation to explain how it will work.
Big ideas deserve big explanations. That is how voters separate glittering campaign promises from governing reality.
