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

Even If Pandemic Models Were Right, Were Covid Lockdowns Wrong?

1889 has been quite critical of pandemic modeling that government officials have relied on for their Covid-19 response. We have also criticized shutdown orders in light of flaws in the models. But let’s assume for a moment that the worst predictions really would have come true if nothing was done. Even in those worst case scenarios, it’s fair to ask if our governments did the right thing. Were involuntary shutdowns justified, or would people have found a way to both limit the contagion and maintain some level of productivity? Was putting healthy citizens under house arrest acceptable even if they were willing to risk infection?   While large groups of people are often compared to herd animals, we are not sheep. We don’t behave like animals. We can, have, and will step up when our communities are in danger. When government and journalists give incomplete or false information, people will act irrationally. Depending on the situation, some will blindly follow the first aut...
Read more

COVID Inspires Tyranny for the "Good" of Its Victims

The Christian philosopher, C.S. Lewis, once said, "Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies." The moral busybodies C.S Lewis warns of reminds me of those who would have Americans give up their liberty to combat COVID-19.   A recent Oklahoman op-ed compared COVID-19 to World War II, stating that the number of deaths from COVID-19 is approaching the number that died fighting for this country and the freedoms it protects. This comparison is, of course, nonsense. This suggests that a virus with a high survivability rate is an equivalent threat to the Nazi and Japanese regimes that brutally murdered millions. The piece uses wartime rationing of meat and cheese, a sacrifice necessary to ensure men on the front lines had adequate nutrition, to justify Americans accepting counterproductive lockdowns in exchange for additional stimulus c...
Read more

The High Duty of Elected Officials and Ways They Fall Short

With an election just completed (the alleged voting, anyway), a legislative session coming up, constant talk of spending to offset the impacts of COVID-19, and elected officials trying to mandate our way out of a disease, the duty of elected officials in their official positions is worth considering. The 1889 Institute recently published a booklet for state lawmakers that discusses various issues and possible solutions. Included in that booklet is a short discussion of the central duty of elected officials, which is expanded here. What is the central, over-arching duty of an individual after having been elected to public office? Public oaths of office give a strong hint, and the Oklahoma Constitution is a good place to start. Article XV includes the oath of office, which states that an Oklahoma public official swears to “support, obey, and defend” the constitutions of the nation and the state, that the official will not take bribes, and that the official will discharge duties as best...
Read more

1889 Institute's Statement Regarding School Closures

The 1889 Institute, an Oklahoma think tank, has released the following statement regarding Joy Hofmeister’s proposal to keep schools closed for the remainder of the school year. We at the 1889 Institute consider Joy Hofmeister’s proposal to close Oklahoma’s schools for the rest of the school year a gross overreaction to the coronavirus situation. Even in the best of times and circumstances, suddenly shifting every student in the state from traditional classrooms to online distance learning will have negative educational consequences. This in addition to the economic burden on two-earner families forced to completely reorder their lives with schools closed. We believe many of our leaders have overreacted to worst-case scenarios presented by well-intended health experts with no training or sense of proportion in weighing the collateral damage of shutting down our economy versus targeting resources to protect the truly vulnerable. We say reopen the schools and stop the madness. ...
Read more