7.26.24 – Ray Carter & Curtis Shelton, OCPAThink.org
Since 2019, Oklahoma has been among the states experiencing the greatest level of net domestic migration as the number of people moving to Oklahoma has exceeded those leaving the state.
And those new citizens have increased Oklahoma’s net adjusted gross income by more than $1 billion, based on Internal Revenue Service data.
In 2020, people moving to Oklahoma brought with them more than $2.4 billion in adjusted gross income. In 2021, those leaving other states to become Oklahomans added more than $2.6 billion in adjusted gross income to the state. And in 2022, the most recent year for which data are readily available, newly arrived citizens brought more than $2.9 billion in adjusted gross income with them.
Those figures more than offset the loss of income from individuals who moved out of Oklahoma, boosting net adjusted gross income by more than $1 billion total over those three years.
Those figures bolster prior reports, including an analysis of U.S. Bureau of Labor Statistics data that found more new jobs were created in Oklahoma from March 2019 to 2024 than in 41 other states. Oklahoma ranked 9th best nationwide.
However, while Oklahoma is attracting more new citizens through domestic migration than most states around the country, it continues to lag the nation’s leading states for economic growth.
A recent post by officials with the Committee to Unleash Prosperity, which seeks to educate policy makers about government policies proven to maximize economic growth and equitable prosperity, noted that “red states”—those that supported the Republican presidential candidate in the 2020 election—are outpacing blue states. And some conservative states are leading by a wide margin on economic growth due to their tax systems.
“Seven of the top 10 states in net adjusted gross income (AGI) change were red,” the Committee to Unleash Prosperity noted. “Florida also led in this category, with its four-year gain of $116 billion. Texas was second, at $31 billion.”
Notably, neither Florida nor Texas has a state income tax. The state ranking third in net adjusted gross income change was Arizona, which has an income-tax rate of 2.5 percent.
Oklahoma’s current top income-tax rate of 4.75 percent is higher than several neighboring states, including Texas (which has no personal income tax), Arkansas (where lawmakers recently voted to cut the rate to 3.9 percent) and Colorado (4.4 percent), while Missouri’s top rate of 4.8 percent is almost the same as Oklahoma’s rate. Among bordering states, only Kansas and New Mexico have significantly higher personal income-tax rates than Oklahoma.
This year, Gov. Kevin Stitt and House Speaker Charles McCall both supported cutting Oklahoma’s personal income tax to make the state even more attractive for investment and job creation. However, that effort was derailed by the opposition of Senate leaders.
During this year’s legislative session, Stitt said that gradually eliminating Oklahoma’s personal income tax will reap dividends for years because of the economic stimulus it provides, leading to higher levels of job creation and rising incomes.
“Long term, my job is to try to grow the state and make us the most business-friendly state,” Stitt said. “And I would prefer to have an income-tax cut, get us down to zero.”