Taxpayers who donate to charities, including churches, dodged a bullet last week as lawmakers pulled a controversial bill that would cap the deduction for contribution.
House Bill 2347 by Rep. Kevin Wallace, R-Wellston, and Rep. Leslie Osborn, R-Mustang; and Sen. Kim David, R-Wagoner, and Sen. Eddie Fields, R-Wynona, was pulled after a firestorm of protest that included statewide Baptists and former U.S. Sen. Tom Coburn.
The Joint Committee on Appropriations and Budget voted 23-2 on May 8 to advance the bill. Rep. John Bennett, R-Salisaw, and Rep. Kevin Calvey, R-Oklahoma City, were the lone no votes. Rep. Katie Henke, R-Tulsa, Rep. Terry O’Donnell, R-Catoosa, and Rep. Eric Proctor, D-Tulsa, voted for the tax increase.
HB2347 would have placed a two-year $17,000 cap on itemized deductions. Itemized deductions can lower a person’s tax bill and can be claimed on charitable donations, medical expenses, property taxes, mortgage interest and certain other out-of-pocket expenses.
“Efforts to cap itemized deductions in order to increase personal income taxes by $187 million on more than 426,000 Oklahomans directly oppose the promises by conservatives to do the tough work of going line by line through every expenditure of government and to reform government so that it lives within the current tax burden in Oklahoma, especially during a tough economy,” Coburn said in a letter to lawmakers. “These efforts should stop immediately. Oklahoma’s economy is hurting due to the recessionary effects of OPEC’s energy price war and stagnant economic growth due to the failed tax, spend, and regulate policies for eight years under the Obama administration.
“Oklahoma policymakers shouldn’t exacerbate Oklahoma’s problems by enacting a tax increase that penalizes the productive behavior of Oklahomans who tithe, have a mortgage, charitably give, pay significant sums of property taxes to support their local schools, and pay for significant family medical expenses.”
Coburn said lawmakers should reject “backdoor income tax increases” and instead work to “eliminate millions in subsidies for out-of-state wind companies, millions in bloat and waste in higher education, millions of tobacco settlement spending on efforts harassing Oklahomans about their health, millions diverted to the build-up of funds for Career Tech buildings and non-classroom spending in common education, millions in rebates for tribal entities selling cigarettes, millions in preferential tax treatment for tribal activity that competes with non-tribal commerce, and millions in administrative overhead exploding in our public schools.”
“Ending these inappropriate spending efforts are all better substitutes than a personal income tax increase of $187 million on 426,000 Oklahomans,” Coburn said. “I urge lawmakers and the Governor to reject the rhetoric of lobbyists, special interests, and tax consumers and fulfill their campaign promises to protect taxpayers.”
Dr. Anthony L. Jordan, executive director-treasurer of the Baptist General Convention of Oklahoma (BGCO), called Oklahoma House Bill 2347 “an affront to the Oklahoma standard.”
Jordan said he believes the measure would undermine charitable giving in the state and impede the ability of nonprofits and ministries to serve people.
“Oklahomans are known around the world for charitable giving and serving people in desperate need,” Jordan said. “To artificially cap deductions undermines the very people and organizations who make up the Oklahoma Standard. It is flawed to think the Oklahoma government can benefit in the long run by reducing deductions for the very individuals who support expansive work of nonprofit and faith-based organizations.
“This bill will undercut charities, non-profits, and ministries across this entire state and will undercut our ability to serve people. I am deeply upset and disappointed to think of the countless churches and ministries that will be harmed by this deduction limit, including disaster relief, universities, children’s homes and ministries, hunger relief and senior care ministries, to name but a few, which depend upon charitable contributions, often from major donors.”