Skip to main content

Top-Ten in Low Taxes, But Oklahoma Still Has Much Room for Improvement


In a comparison of states’ total taxes as well as spending in certain broad categories that the 1889 Institute has just published (Oklahoma Government Revenues and Spending in Perspective – Update), some interesting facts arise. Using federal data, we compared states by looking at the percentage of personal income collected in state and local government revenues. We also looked at the percentage of personal income spent in six broad spending categories: higher education, public education, public welfare, hospitals, highways, and corrections.

The data shows that in 2017 Oklahoma’s state and local governments:

  • Extract 13.2 percent of Oklahomans’ personal income in taxes and fees, moving Oklahoma into the Top Ten lowest-taxing states, ahead of Texas. 
  • Spend 12.38 percent of personal income on the six featured spending areas (which include federal dollars), only a little below the national average of 12.7 percent. While 9th overall (least spent being first), Oklahoma is not that much better than the 25th-ranked state.
  • Spend a higher percentage of our income on higher education than 28 states.
  • Spend a higher percentage of income on public education than seven states, including Arizona, a leader in educational choice and progress, but making us a Top-Ten state in how well we hold schools’ feet to the fire for their spending. 
  • Spend a higher percentage of state personal income on public welfare than 24 states.

In addition, we calculate that if Oklahoma’s state and local governments increased efficiency by 10 percent, doable given the examples of other states, $2 billion would be available to enhance existing services, provide new ones, or be returned to taxpayers.

Unfortunately, compared to two years earlier, the personal income per capita (average per person) numbers, which are adjusted for cost of living, show Oklahoma having lost some ground relative to other states. In fact, the unadjusted personal income per capita actually fell from 2015 to 2017. After all, when the oil industry sneezes, Oklahoma catches cold. 

Nevertheless, Oklahoma is still in the top half of states when it comes to average personal income. A big reason for this is due to the adjustment for cost of living. Oklahoma has a low cost of living compared to the vast majority of states. We’re not just Top-Ten in that category; we’re Top-Five. It’s a distinction we should strive to keep.

It’s now arguable that Oklahoma is a low-tax state. But when it comes to specific spending categories, we’re all over the place. We can get a lot better overall if we become more like Florida or New York on higher education, Texas or Virginia on welfare, Georgia or Arizona on highways, and Massachusetts or Illinois on corrections.

We should strive to be the leanest and most efficient of all states in every category of spending at all levels of government. Doing so, we would extract as little as possible from citizens, leaving the greatest possible amount of resources in the private sector, where our free choices cause resources to migrate to their highest valued uses.

Oklahoma has not yet achieved the status of being a low-spending state, but it would be something to celebrate. Some seem to think that high spending and high performance are synonymous, but every value-adding organization on earth knows better. Unbridled spending shows a lack of accountability and an uncritical willingness to take from hard-working taxpayers. It’s a path toward weakness, not strength.

Byron Schlomach is Director of the 1889 Institute. He can be reached at bschlomach@1889institute.org. 

Popular posts from this blog

How Oklahoma Can Be Number One in Covid Policy

South Dakota, that sound you hear behind you is footsteps. Oklahoma can be Number One in the policy response to Covid-19. We’ve done fairly well to this point compared to other states, but to take us to the top, our leaders will need good, accurate information, must ignore hyperbole (often outright falsehoods) from the media-politico controversy machine, and should trust individual Oklahomans to do what is best for themselves and their families. Oh, and it would help to have some courage in the face of criticism (or ear plugs to tune out the whining). Fortunately, 1889 Institute has compiled a very helpful webpage containing the cold, hard facts about SARS-CoV-2. Based on these facts, not hysteria and virtue signaling, we recommend some straightforward policy responses. The page is here for anyone who wants to arm themselves with knowledge, rather than bask in the newly virtuous habit of broadcasting how afraid and ignorant one is. For example, did you know that the evidence for wid...
Read more

Can Government Force You to Close Your Business?

1889 Institute takes no position on whether any or all of these measures are warranted or necessary, or whether their economic fallout would inflict more human suffering than they prevent. We are simply evaluating whether they are legal.   With the unprecedented (in the last 100 years at least) reaction surrounding the outbreak of Covid-19, questions that few living legal scholars have considered are suddenly relevant.   Can a quarantine be ordered?   Can a mass quarantine, lockdown, or “cordon sanitaire” be ordered? Can businesses be ordered to change their behavior?   Can businesses be ordered to close? Can state governments order these measures? Can local governments order these measures? My legal brief addresses these issues from a statutory point of view; it is clear that state law gives the governor and mayors broad authority in a state of emergency. They must, of course, do so in a neutral way that they reasonably believe will help preve...
Read more

Filling the Truth Vacuum Regarding COVID-19

With COVID-19 heating up again, and the resumption of societal shutdowns in other states, a pandemic strategy never seen in modern times, it seems appropriate to post facts with appropriate recommendations for action independent of politicized governmental institutions. Providing this information, along with relevant context, is the purpose of the new “ COVID-19 ” webpage on the 1889 Institute’s website .   With the recent widely-reported surge in COVID-19 cases and hospitalizations, the impression created is that the pandemic has spiraled out of control. Therefore, our first factual installment is the following figure, which shows the number of daily new cases and the number of daily new deaths from COVID-19 in Oklahoma. Seven-day moving averages are also illustrated in order to show trends.   Source: The Covid Tracking Project ( https://covidtracking.com/data/state/oklahoma ), which assembles data daily from the Oklahoma Department of Health (OKDOH). OKDOH does not provide l...
Read more

George Floyd versus Union Cops: Is that the Real Story?

No one with a brain can look at the video of the Minneapolis cops putting their weight on George Floyd’s entire body, including a knee to his neck, and see his resulting death as anything but murder. The first autopsy cited pre-existing health conditions as a contributing factor in Floyd’s death. The second autopsy found Floyd’s death to be murder due to his carotid artery being crushed, cutting off blood flow to his brain. The official coroner seems to have come around to the murder conclusion, but regardless, those cops killed a man for passing a counterfeit 20-dollar bill; and because he’s dead, we can’t even find out if Floyd knowingly did so. Were the cops indifferent to Floyd’s pain because of racism? I don’t know, and no one else does, either. The cop with his knee on Floyd’s neck is obviously responsible for Floyd’s death. The other cops, who did nothing to alleviate Floyd’s suffering when he complained that he couldn’t breathe, are at least culpable in the murder. Three of the...
Read more