Brandon Dutcher
Guest Opinion
EDMOND —
Oklahoma should phase out its personal income tax and replace it with nothing. No property tax increases. No sales tax increases. Nothing.
Here are three reasons why.
First, our taxes are too high. Our friends on the Left like to say Oklahoma is a “low-tax state,” to which one must reply: “By what standard?” University of Oklahoma historian J. Rufus Fears has pointed out that “the American public pays an amount of taxes that no despotic pharaoh in antiquity would have ever dreamt of imposing upon his people.”
The average Oklahoman was forced to work more than three months last year before he was able to enjoy the fruits of his own labor. “Tax Freedom Day” arrived on April 2, 2011—that’s the day the average Oklahoman had finally earned enough money to be able to pay the federal, state and local tax collectors. This tax burden is inappropriate for a free people.
Regardless of whether Oklahoma’s tax burden ranks first or 50th in 50-state comparisons (and here’s hoping we can get to 50th), the burden is too heavy.
Second, our government spends too much money. According to the latest Comprehensive Annual Financial Report (CAFR), released last month by the Oklahoma Office of State Finance, government spending is at an all-time high. Total state expenditures (not merely appropriations, which accounts for only 40 percent of state spending) grew from $9.65 billion in FY-2001 to $16.64 billion in FY-2011. The politicians in Oklahoma City do not have a revenue problem.
What they have is a spending problem, which is in part a bureaucratic-overhead problem. According to a 2011 publication of The State Chamber’s research affiliate, Oklahoma’s government bureaucracy is among the nation’s largest. Among the 50 states, Oklahoma ranks 14th in the number of state and local government employees as a percent of the population.
For all the talk of “maintaining core services,” what the politicians are actually maintaining is bureaucratic bloat. And they’re doing so on the backs of the hardworking taxpayers who elected them to do otherwise.
Third, and perhaps most importantly, phasing out the income tax would create an economic boom in Oklahoma, a boom in which Oklahoma’s local communities would participate.
A new study, “Eliminating the State Income Tax in Oklahoma: An Economic Assessment,” estimates that by phasing out the income tax over a 10-year period, Oklahoma could expect a significant increase in state GDP growth, personal income growth and employment growth. For example, by 2022 the income-tax phaseout would create 312,000 more jobs in Oklahoma than would have been created otherwise.
Yes, phasing out the income tax means appropriated revenue growth would be slower — which is good news, not bad news — but total appropriated revenues would nevertheless continue to rise. I urge you to read the study for yourself at www.ocpathink.org.
Moreover, “stronger economic growth would also increase revenues for local governments across Oklahoma,” the study says. “And, because there is no static tax reduction, every dollar of increased revenue created by Oklahoma’s stronger economy would increase the expenditure power of the local governments. Based on the economic growth estimated above and assuming local government revenues’ share of personal income remains constant, in aggregate, revenues for local governments would increase by $100 million in 2013, rising to an increase of $3.5 billion by 2022.”
The politicians in Oklahoma City have more than enough money for their state budget. It’s time they showed some concern for your family budget.
BRANDON DUTCHER is vice president for policy at the Oklahoma Council of Public Affairs (OCPA), a free-market think tank. He can be reached at twitter.com/brandondutcher or facebook.com/brandondutcher.
