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Frank Keating on Tax Reform

Former Republican OK Governor


Government spending is not the governmentís money

We understand that the money we spend here is not our money. It belongs to the men and women of our state who earn it day-by-day, hour-by-hour, for the purpose of putting their children through school, permitting themselves to have a safe and secure retirement. This year we will have a significant surplus to spend or to give back in the nature of tax cuts. But look what weíve done in the course of the last five years -- nearly six years now. We have made significant progress in giving back some of the money to the people. We enacted the largest tax cut ever in stateís history. We cut the income tax from seven percent to six-and-three-quarters percent. And, no great surprise, because we are permitting more Oklahomans to keep more of their money, our state is more prosperous than ever before.
Source: State of the State address to Oklahoma legislature Feb 5, 2001

Lower state income tax rate from 6.75% to 3.75%

We have analyzed what has held us back, and one of those reasons is we tax everything. Oklahomaís high marginal income tax rate chills savings and investment and it is at the same rate as the capital gains tax. So if you have a small business in Oklahoma, you will leave the state to sell it and we will lose you, your productivity, your investment and your genius forever. That is unacceptable.

I propose to cut the state income tax by half a point and to continue that half point cut over the next six years. This will lower Oklahomaís rate to 3.75%, which is lower than all of our neighbors, except Texas. Oklahomaís current high marginal rate of 6.75% is a scandal. It is higher than Kansas, higher than Missouri, higher than Colorado. And, of course, it is higher than Texas that has no tax at all. With a top rate kicking in at $10,000 for a single person, it is far more punitive to our lower income residents than even the tax systems of Arkansas and New Mexico. Itís time to lower it.

Source: State of the State address to Oklahoma legislature Feb 5, 2001

Reduce and ultimately abolish the estate tax

We have talked about the estate tax and we have worked around the edges, but we havenít done what we have to do. To save Oklahomaís family farms and businesses, we need to become a federal pick up state and slowly, but ever so surely, reduce and ultimately abolish the estate tax. It is a non-budget item; we can do it this year.
Source: State of the State address to Oklahoma legislature Feb 5, 2001

No national sales tax or VAT.

Keating adopted the National Governors Association policy:

Source: NGA Executive Committee Policy Statement EC-9 00-NGA1 on Feb 15, 2000

Let states independently determine estate taxes.

Keating adopted a letter to Congressional leaders from 37 Governors:

We are writing to request equal treatment between states and the federal government on estate tax changes. Regardless of oneís view about phasing out the federal estate tax, the Governors are absolutely united in opposing any action that would discriminate against states in the phase-out of the state and federal estate taxes. This issue needs to be addressed before the Senate goes to conference with the House.

Governors believe that the ability of states to independently determine their own tax revenue policy is a basic tenet of federalism. Moreover, no federal tax bill should be enacted without close consultation with the states.

At the very least, there must be equity in the treatment of the state death tax credit in the tax bill the Congress considers with the proposed phase-out of the federal estate tax. Governors oppose provisions that impose disproportionate impacts on state revenue systems. The changes proposed by the Senate would have abrupt, significant adverse impacts on state revenues at a particularly onerous time for many states. The potential impact on states would begin next year and have a potential impact of between $50 and $100 billion over the next ten years.

We urge the leaders to respect those rights and to restore fairness.

Source: National Governor's Association letter to Congress 01-NGA19 on May 23, 2001

Other governors on Tax Reform: Frank Keating on other issues:
AK Frank Murkowski
AL Bob Riley
AR Mike Huckabee
AZ Janet Napolitano
CA Arnold Schwarzenegger
CO Bill Owens
CT Jodi Rell
DE Ruth Ann Minner
FL Jeb Bush
GA Sonny Perdue
HI Linda Lingle
IA Tom Vilsack
ID Dirk Kempthorne
IL Rod Blagojevich
IN Mitch Daniels
KS Kathleen Sebelius
KY Ernie Fletcher
LA Kathleen Blanco
MA Mitt Romney
MD Bob Ehrlich
ME John Baldacci
MI Jennifer Granholm
MN Tim Pawlenty
MO Matt Blunt
MS Haley Barbour
MT Brian Schweitzer
NC Mike Easley
ND John Hoeven
NE Dave Heineman
NH John Lynch
NJ Jon Corzine
NM Bill Richardson
NV Kenny Guinn
NY George Pataki
OH Bob Taft
OK Brad Henry
OR Ted Kulongoski
PA Ed Rendell
RI Don Carcieri
SC Mark Sanford
SD Mike Rounds
TN Phil Bredesen
TX Rick Perry
UT Jon Huntsman
VA Tim Kaine
VT Jim Douglas
WA Christine Gregoire
WI Jim Doyle
WV Joe Manchin III
WY Dave Freudenthal
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