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

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

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

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

COVID-1984: Have Americans Become Too Complacent in Our Liberties?

Alongside the coronavirus, another pandemic is gripping our country, one that we will feel the consequences of long after we reach herd immunity. I dub this pandemic COVID-1984, and I fear it will rot the roots of the Tree of Liberty. The consequence will be a government emboldened by a passive citizenry. One of the most surprising aspects of our current situation is how willing people have been to report their fellow citizens to authorities for the most minor and meaningless offenses. I used to wonder how people in authoritarian countries like Stalinist Russia and Maoist China went along with those cruel regimes. It turns out a tiny bit of fear is all you need to be a successful dictator. And now it’s all the easier to report your neighbors for reading alone on the beach with tip lines.   Even as governors and judges begin to lift stay at home orders, mayors are extending them. A county judge issued a temporary restraining order against Illinois Governor J.B. Pritzker’s sta...
Read more