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Gov. Mary Fallin of Oklahoma has recently been hammering home her pet issue: eliminating the state income tax that makes up 32.1% of Oklahoma's total budget. After the last three years of deep cuts to the state budget that included a 48.6% cut to the Department of Transportation, a 43.7% cut to the Civil Emergency Management Administration, a complete defunding of the Oklahoma State Department, and an average cut of 22.1% to each State Agency, now is certainly not the time to consider giving away almost 1/3 of all state revenues, because you know, things like roads, police, emergency response, and our only tool for effective interstate communication and collaboration we can just live without.
During a time that every state agency in Oklahoma is feeling the pinch, should we really be considering slashing our revenue streams? What costs will be associated with such a drastic reduction? Where are we expected to establish revenue streams that will comparatively fund local government to even the present anemic extent? |
| Of the 9 states without a personal income tax, all have corporate income taxes to make up part of that difference. Texas has become the most recent of these states to add a corporate income tax issued as a gross margins tax on businesse. If the reasoning for abolishing the Oklahoma Income Tax is to make the state more attractive to businesses, we're certainly going about it in an awfully strange way.
In fact, Oklahoma is already doing better than most of those 9 states in per capita income growth and shows a lower unemployment rate than 6 of those in that field, and lower than her burgeoning neighbor Texas by 2.4%. Oklahoma could scarcely be more business friendly, offering an effective tax rate of 1.1% to OneOK (the natural gas utility), and a scandalous -2.1% to Chesapeake Energy.
With such a history of big business giveaways and a stated goal of making Oklahoma more business friendly it doesn't take a genius to discover where the Republican legislature and Governor will turn to shore up an already bleeding state budget. Sales tax is likely to be their tool for revenue generation, but Oklahoma already has an average sales tax of 8.15%, the fifth highest in the nation. How much more are working families expected to pay? Will Gov. Fallin be happy when we rank no. 1? Tennessee's top spot of 9.35% is not that far away.
We know from Tennessee's example that those who can cross borders, use mail order and the internet to shop for everything from groceries to durable goods do so, effectively removing the sales tax as a reliable source of revenue. Our state's economy is the next to falter if we choose this road as we could see if only we had a State Department in Oklahoma. Oh wait, I forgot, they've been completely defunded.
There is a real and present danger here in Mary Fallin as Governor of Oklahoma. More so there is a danger to our slowly recuperating economy, and steady rise in the ranks of per capita income. From Fallin's actions and policy proposals we might as well change our state motto to: "From labor, all tax revenue is possible." |
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