(The Center Square) – Oklahoma continues to remain one of the states with the lowest tax burdens in the country, a recent report concludes.
Still, historical trends indicate The Sooner State's national ranking has dipped over the last two years even though there has been a slight reduction to the overall tax burdens imposed on Oklahomans.
Personal finance website WalletHub recently released its "2023 Tax Burden's By State" report and deemed Oklahoma as the 10th state with the lowest tax burden in America.
Historical analysis indicates that while Oklahoma held this designation last year, the state was ranked 7th in the nation in 2021.
Each year, Wallethub assesses the property taxes, individual income taxes and sales/excise taxes in each of the 50 states and then analyzes the impact these taxes have on residents' pocketbooks as a percentage based on the state's total personal income. Each state is then ranked based on this tax burden impact.
Overall, Oklahoma's 2023 tax burden only takes up about 7.12% of personal income, according to Wallethub Analyst Jill Gonzalez. "This is mostly because it has one of the lowest property tax burdens nationwide, at just 1.76%. Plus, the income tax burden is among the bottom 15, at 1.69%."
Oklahoma's tax burden is only about 2.06% more than the state with the lowest tax burden, Alaska, according to the study. The state with the worst burden in 2023 is Hawaii. Hawaii's burden is roughly 57% higher than Oklahoma's, 12.31% this year.
Historical data from the last two years indicates that the impact taxes on personal income on Oklahomans was slightly lower in 2023, even though the state was higher ranked in 2021. Two years ago, the burden impacts of income and sales taxes combined rested at roughly 5.48% of personal income. This year the burden of these was about 2.2% less than in 2021, or 5.36%.
The burden of Property tax, on the other hand, has risen slightly during this lookback period. In 2021, the burden impact for property taxes was 1.67%, indicating that property tax burdens have increased 5.1% in the last two years.
Oklahoma's low tax trends could help to boost the state's economy, according to Gonzalez, as it allows more money to stay in the wallets of state residents, giving them more spending power.
"A lower tax burden can drive economic growth in a state," Gonzalez said. "For example, reduced property taxes and low income taxes in Oklahoma can be an incentive for corporations to open new facilities and this can only benefit the state's economy."
Still, national inflation seen around the country and in states like Oklahoma could negatively impact tax revenue in the future affecting tax burdens, Gonzalez projected.
"Inflation could have a negative impact on the state's tax revenues," Gonzalez added. "This is because Oklahoma's highest tax burden is represented by the sales and excise taxes. While these taxes do increase with inflation, price hikes cause people to reduce their spending and purchase only necessities. In turn, this can end up reducing overall sales tax revenues in the state."
via Oklahoma's Center Square News
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