EDMOND —
In politics today, myths are often more powerful than facts. But in the real world, facts still hold sway.
Myth: Economies in states without an income tax perform better than in other states
Fact: There is no linkage between the performance of a state’s economy and its use of an income tax. Since 2000, the per-capita personal income growth rankings of states that lack a personal income tax are third, fourth, 11th, 25th, 31st, 32nd, 35th, 41st and 50th. In short, while some of these states have performed very well others have performed very poorly. And two-thirds of these states rank between 25th-50th among the 50 states.
Myth: The Texas economy, a state without an income tax, is outperforming Oklahoma’s economy.
Fact: Using the most widely recognized measures of state performance, Oklahoma’s economy compares favorably to Texas. For example, Oklahoma’s economy on a per-capita basis has grown, since 2000 at the 15th fastest pace in the nation. Texas is 32nd. Oklahoma’s per-capita personal income has grown since 2000 at the seventh fastest pace in the nation. Texas ranks 25th. Oklahoma’s median household income since 2000 has grown at the fourth fastest pace in the nation. Texas ranks 22nd on this metric.
Myth: A recent report produced by the Oklahoma Council of Public Affairs proves that eliminating the personal income tax will benefit the state economy.
Fact: The report, authored by Arduin, Laffer & Moore, a Florida-based consulting firm, cavalierly uses sloppy statistics to inflate the estimated benefit from eliminating the personal income tax. Specifically, the report’s econometric analysis suffers from what economists and statisticians refer to as an “endogeneity problem” — a problem that results in biased estimates (a number of state economists have raised this concern in recent weeks). In actuality, the econometric evidence with regard to the economic impact of state income tax cuts is unclear. In fact, there is convincing evidence that tax cuts financed through cuts to education and highway spending actually decrease economic growth.
Myth: Government spending detracts from economic growth.
Fact: Actually, some government spending is necessary to foster economic growth. When government spends money on education, it is providing the next generation of workers with the human capital it needs to prosper. When government spends money on highways, it provides the means by which firms can get their products to market. When governments spend money on prisons, it keeps criminals off the streets thus letting commerce flourish. In fact, it is hard to imagine any successful economy populated by uneducated, unhealthy people who must travel on dirt roads populated by criminals. In short, government spending matters too.
Myth: Low taxes are the most important way to stimulate economic growth.
Fact: Much more important to taxes is quality of life. In order for an economy to grow it needs to create a place where people want to live and work. It must be a place that offers the amenities that make life enjoyable. It must be a place where people are proud to call home. Our own experiences tell us that this is rarely about taxes. After all, when we brag about Oklahoma to our out-of-state friends and family, what do we say? I don’t know about you, but it’s not the tax system I rave about — it’s the people, the cities and the atmosphere. Let’s not forget that enhancing our quality of life is what our focus should be.
MICKEY HEPNER is the dean of the College of Business Administration at the University of Central Oklahoma. Hepner serves on the Executive Committee of the Board of Directors for The Oklahoma Academy.
Opinion
Facts remain important in tax debate
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Don’t leave Oklahoma!
May is graduation season. As I have done every year as lieutenant governor, I have given multiple commencement speeches. Advice flows freely during this time and it usually runs the gamut. What to do, what not to do, how to do ‘x’, be sure not to do ‘y.’ Too often commencement speakers speak in big generalities. So general, the message is frequently lost or forgotten.
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Last-minute funding proposals not in state’s best interest
All indications point to this being the last week of this year’s legislative session. The Legislature will go home a week early. This is good news for Oklahomans as not only will there be cost savings but all Oklahomans should breathe a sigh of relief when the Legislature stops making new laws a week ahead of schedule.
As usual, the Legislature will take a number of important votes during the last week. Some will be forced due to attempts to introduce and pass far-reaching, new policies that should have been introduced much earlier in the year. -
BY THE NUMBERS: Oklahoma still needs to invest in its economy
After six months of stagnation, the Oklahoma economy finally appears to be expanding again albeit still weakly. Unfortunately, our leaders aren’t making the investments we need to give our economic prospects a boost.
Last week the Oklahoma Office of Management and Enterprise Services reported that in April state General Revenue fund collections were 5.2 percent above the estimate and 14.7 percent higher than last year’s collections. Under normal circumstances, such a report would indicate that the Oklahoma economy was very strong. But this isn’t a normal circumstance, and April isn’t a normal month. -
Americans deserve the truth on Benghazi
Lately, the media has been consumed by the controversies surrounding the White House. Among these controversies is the horrific terrorist attack on the United States’ diplomatic compound in Benghazi that took place Sept. 11, 2012. As more people come forward with additional information regarding the attack on the consulate, many Americans, including myself, are still asking for the truth.
The Obama Administration and the State Department have been less than forthcoming with key information on Benghazi and recent information points toward a major cover-up. -
Seizure of AP phone records insult to independent press
Distrust of government secrecy has been elevated to an exceptional level with the disclosure the Justice Department covertly examined two months of Associated Press phone records to determine who leaked details to the AP about a foiled terrorist plot.
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HEY HINK: Some people just are not cut out for command
Recent headlines cause me to remember an incident that occurred on an army base some years ago. Warning here: I’m taking some liberties with names and details, but the basic outline of events is accurate.
A certain company commander, let’s call him Captain Duntz, had command of a motor pool on a large army base in the continental U.S. -
We’ve become our own worst enemies
The past couple months have been marked by a seeming unprecedented number of man-made tragedies, as distinct from those caused by violent outbursts of the natural world, such as earthquakes, hurricanes and tsunamis.
You don’t want to dwell too long on the negative, but we do have to take notice of horrific human events and we owe it to ourselves to respond to them in some way. We don’t always agree on those responses, however, and that usually exacerbates the problem. -
Let’s reimburse higher ed for remediation costs
The good news: Oklahoma schools are teaching phonics. The bad news: It’s in college.
Students at Tulsa Community College, for example, can take a college English course called “Spelling and Phonics,” which “helps students master basic spelling literacy, principles of phonics and decoding skills.”
This sort of higher education brings to mind former Boston University president John Silber’s quip: “Higher than what?” -
AGAINST THE GRAIN: Department of Commerce highlights Main Street successes
The 24th annual Oklahoma Main Street Awards Banquet was at the National Cowboy & Western Heritage Museum last week. Oklahoma Department of Commerce Secretary Dave Lopez addressed the gathering, and spoke of how the Commerce Department works with Main Street organizations throughout the state that are working to improve their downtown areas. Lopez pointed out that the partnership between his department and those local organizations has brought new life to those communities and that the attendees would see some of that revitalization in a video presentation. Oklahoma Gov. Mary Fallin also addressed the gathering, and said the Main Street program has resulted in more than $1 billion in investments in the state and more than 1 million volunteer hours in its 24 years of operation.
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OUR VIEW: Be Edmond needs your help
BMX star and local legend Mat Hoffman knows what’s it like to fall from great heights and find yourself at one of the worst low points in life. He also knows how to climb back up and tackle life’s problems head on.
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Don’t leave Oklahoma!
