During his visit to Poteau on Wednesday in which he spoke to people at a meet-and-greet and luncheon at the Donald W. Reynolds Community Center, Republican governor candidate Mike Mazzei explained his plan to get Oklahoma to zero state income tax.
In his first year, Mazzei would seek a cut from 4.5 to three percent state income tax.
Second, he would focus on exemptions.
“By cleaning out the tax code, we can get the income tax down to 2.5 percent because we know from our tax commission that our effective tax rate is 3.1 percent,” he said. “Everyone goes through the rigmarole of taxing this deduction and this exemption, and it artificially inflates what our income tax is.”
When it comes to eliminating the state income tax, Mazzei said it would have to go to a vote of the people.
“We’d have to go to a vote of the people and say, ‘Do we want to have a model like Tennessee where they tax some things that we don’t tax?'” he said, mentioning an entertainment tax and a tax for services like dog grooming that states without income tax have. “But Tennessee’s economy has grown 58 percent more than ours over the last 10 years, so it’s proof that taxing our economy is way more efficient than taxing people’s labor.”
In comparing revenue sources in no-income tax states, Mazzei acknowledged that Texas and Florida get more tourism, but doubted that Tennessee gets a meaningful amount more than Oklahoma.
“But they don’t have oil and gas. We have oil and gas. That has much more economic output and tax collection than country music tourism, in my opinion,” he said. “The other big oil states — North Dakota, South Dakota, Alaska, Texas, of course — they don’t have any income tax.”
Mazzei, who served as budget director for Gov. Kevin Stitt after being a state senator from 2004-16, said he has looked closely at budget numbers and state auditor reports to guide the move to eliminating state income tax.
Mazzei said he would avoid megadeals to attract businesses to Oklahoma.
“I do believe to focus our energy on Oklahoma-based small businesses, we have to stop throwing hundreds of millions of dollars on out-of-state and, especially, foreign companies,” he said, mentioning an aluminum project in Inola that includes $1 billion in tax incentives and $250 million directly in taxpayer money to United Arab Emirates-based Emirates Global Aluminum. “The return on investment calculations are 200 years for Oklahoma taxpayers to get their money back, and the promise from this United Arab Emirates company is only a thousand jobs.”
He said the better way would be to provide 5,000 Oklahoma businesses with best practices, no-interest loans, advance marketing and growth strategies.
“If those 5,000 companies grow 10 jobs each, it’s not as sexy. We’re talking 50,000 jobs versus 1,000 of a Middle East company. It’s going to take profits back to the Middle East, whereas the Oklahoma-based jobs are going to keep the jobs here and the profits here,” he said.
In addition to reviewing the audit reports, Mazzei said he would look at the reports from the Incentive Evaluation Commission to find savings for the state.
“There’s tons of audits that have addressed bad financial management practices,” he said, mentioning audits of SoonerCare and Tulsa Public Schools, “but these audits sit on the shelves and the legislature has done absolutely nothing about that.”
He said he would not give taxpayer money to wind, solar or other renewable energy projects. However, he said he would allow renewable energy built on private land.
“I killed a $1.5 billion transferrable tax credit program to wind energy. It never made sense to me as an Oklahoma small business owner,” he said. “As a Constitutional conservative, if a private landowner wants to have their own solar farm on their property, as long as they’re not creating any public safety hazards for their neighbors, they are free to do whatever they want and sign corporate deals with whoever they want. We just don’t want any taxpayer dollars subsidizing that.”
Also, he said he would not give tax incentives to data centers.
“The AI revolution is going to demand more and more processing power and more and more data centers. Having said that, it’s a mistake financially to subsidize Google, Amazon, Meta and Microsoft with tax advantages to lure that business to Oklahoma. I’m afraid we’re going to make the same mistake with data centers that we made with wind energy,” he said, noting that data centers do not result in many permanent jobs. He also said data centers are forcing higher utility costs for Oklahomans’ electricity and water.
He also discussed his plans for education, immigration enforcement and other issues.
Other candidates for governor include former state House speaker Charles McCall, Oklahoma Attorney General Gentner Drummond, former state senator Jake Merrick, Chip Keating, Leisa Mitchell Haynes, Kenneth Sturgill and Jennifer Domenico on the Republican side and Democratic state House leader Cyndi Munson.
