Yes.
States with eliminated or significantly lowered income taxes frequently make up the lost revenue through other taxes, namely sales and property taxes.
All states without income tax have higher sales and/or property tax reliance than the national averages. Texas and New Hampshire, for example, have some of the highest property taxes in the country.
Lack of income tax has few benefits for lower-income households. In Florida and Texas, the lowest 20% of families pay a greater share of their income in taxes than the richest 1% in California. That also applies to Oklahoma, where the lowest 20% spend almost double the proportion of income as the top 1%.
A bill passed in May will further reduce Oklahoma’s income tax, which was 7% in 2004, from 4.75% to 4.5%. Those earning the state’s median income will save $143 annually.
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Oklahoma Watch partners with Gigafact to produce fact briefs — bite-sized fact checks of trending claims.
Sources
- National Conference of State Legislatures What Happens When States Ditch Income Tax for Sales Tax?
- Tax Foundation State Sales Tax Breadth and Reliance, Fiscal Year 2022
- Tax Foundation To What Extent Does Your State Rely on Property Taxes?
- Tax Foundation Property Taxes by State and County, 2025
- The Institute on Taxation and Economic Policy Is California Really a High-Tax State?
- The Institute on Taxation and Economic Policy Oklahoma: Who Pays? 7th Edition
- Oklahoma State Legislature Bill Information for HB 2764
- Oklahoma Policy Institute Tax cuts now, crisis later: Oklahoma’s unsustainable budget
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