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

A Reminder of the Ineffectiveness of Covid-19 Lockdowns

Since the beginning of this pandemic, the 1889 Institute has argued against lockdowns even as “experts” advocated for them. Now, months after the weeks-long lockdowns were supposed to end, there are still states in various levels of lockdown. State and local governments have devastated their economies with shutdowns in the name of public health. Yet some politicians, including presidential candidate Joe Biden, have stated a willingness to lockdown the economy again on a national scale to eliminate COVID-19, in a "virus first, economy later" approach. Even as some lawmakers in Oklahoma urge governor Stitt to take more extreme action, it is essential to remember that lockdowns are not very effective. A group of epidemiologists have released a declaration denoting the harmful effects of lockdowns. These include; lower childhood vaccination rates, worsening cardiovascular disease outcomes, fewer cancer screenings, and deteriorating mental health. These consequences are more ...
Read more

The Legislators in Black Robes Strike Again

Once again, the Oklahoma Supreme Court has usurped the Legislature’s constitutional authority. This time, it has legislated new election rules, behind closed doors, on a compressed timetable, and without public input. All with an election looming in which the new rules will apply. On Monday, the Court eliminated the requirement that citizens voting by absentee ballot have their identity verified by a notary. If left unaddressed by the Legislature, absentee voters will be permitted to vote with little more than a pinky-swear promise that they are who they say they are, while in-person voters will still be required to show ID at the polling place. The Court’s decision not only harms the integrity of our election process, but was arrived at through a highly unusual process. The legal challenge to the notarization requirement was launched by a coalition of progressive organizations calling themselves “Let the People Vote.” Their stated reasoning for allowing unverified voting is...
Read more

Destroying Others’ Property Is Violence, No Matter How It’s Done

With characterizations of protests and riots that have occurred over the last several months as “mostly peaceful” and headlines that include “peaceful demonstration intensified,” and “Fiery But Mostly Peaceful Protests,” it’s clear many in the press do not consider property destruction to be violent. Most likely, they mean most of the protesters haven’t physically harmed anyone. Still, during the very same protests, a large proportion of the “peaceful” participants , in obvious acts of aggression and hostility, have vandalized and stolen property. In fact, property destruction and theft are acts of violence, and are therefore legitimately defended against, not because these acts feel threatening, but because they are, in and of themselves, violent.   Nevertheless, it’s common to hear many condemn individuals who use or threaten force in defense of their property. After all, if no one is physically harmed, or even actually threatened, how can damaging inanimate objects possibl...
Read more

OKC Public Schools Elevating a Privileged Elite over Oklahoma Taxpayers

The hypocrisy of the Soviet Union’s pretense of egalitarianism was well known enough to be the subject of mockery and parody. Ronald Reagan never tired of the jokes . Soviet communism espoused equality, but the reality is that party apparatchiks and government officials enjoyed special perks that no one else had access to. This special class wasn’t officially paid much more than the average skilled worker, but enjoyed privileges like dachas on the coast or countryside, special stores with imported goods and without the endless lines that were commonplace everywhere else, and more advanced medical treatment. For all their talk about eliminating class distinctions, the Soviet nomenklatura —those “doing the people’s work”—could feather their nest with the best of ‘em. Apparently, a similar attitude reigns in our government schools. Our friends at OCPA report that Oklahoma City Public Schools (OKCPS) will not offer in-person instruction to students for the first nine weeks of school this ...
Read more