The Edmond Sun


May 14, 2012

Facts remain important in tax debate

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.

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  • St. Louis Post-Dispatch: Why poverty across the world matters to Americans

    A child starving in South Sudan should matter to Americans. That was the message delivered last week by Nancy Lindborg, whose job at the U.S. Agency for International Development is to lead a federal bureau spreading democracy and humanitarian assistance across the world.
    That world has reached a critical danger zone, with three high-level crises combining military conflict with humanitarian catastrophes affecting millions of innocents in Syria, the South Sudan and the Central African Republic.
    But back to that child.

    April 18, 2014

  • Government leadership complicit in overfilling prisons

    One of the thorniest problems facing any society is the question of what to do with transgressors. Obviously, the more complicated a culture becomes, the more factors come into play in trying to figure out what to do with those who choose not to “play by the rules.”

    April 18, 2014

  • My best days are ones normal people take for granted

    It is a weekend for working around the house. My fiancee, Erin, and I have the baby’s room to paint and some IKEA furniture to assemble. I roll out of bed early — 10:30 — and get into my wheelchair. Erin is already making coffee in the kitchen.
    “I started the first wall,” she says. “I love that gray.” Erin never bugs me about sleeping late. For a few months after I was injured in the Boston Marathon bombings, I often slept 15 hours a day. The doctors said my body needed to heal. It must still be healing because I hardly ever see 8 a.m. anymore.

    April 18, 2014

  • Instead of mothballing Navy ships, give them to our allies

    A bitter debate has raged in the Pentagon for several months about the wisdom of taking the nuclear aircraft carrier George Washington out of service to save money. The Washington, at 24 years old a relatively young vessel, is due for a costly refit, a routine procedure that all of the 11 large carriers in service undergo regularly.

    April 18, 2014

  • The pessimist’s guide to grizzly bears and Earth Day

    This coming Friday, to “celebrate Earth Day,” the Walt Disney Co. will release one of those cutesy, fun-for-all-ages, nature documentaries. “Bears” is about grizzly bears.
    The trailer says, “From DisneyNature comes a story that all parents share. About the love, the joy, the struggle and the strength it takes to raise a family.”
    Talk about your misguided “Hollywood values.” I previously have acknowledged a morbid, unreasonable fear of grizzly bears, stemming from a youth misspent reading grisly grizzly-attack articles in Readers Digest. This fear is only morbid and unreasonable because I live about 1,500 miles from the nearest wild grizzly bear. Still. ...

    April 16, 2014

  • Digging out of the CIA-Senate quagmire

    Last week, the Senate Intelligence Committee, led by Sen. Dianne Feinstein, D-Calif., voted to declassify parts of its report on the CIA’s rendition, detention and interrogation program. The White House, the CIA and the Senate still have to negotiate which portions of the report will be redacted before it is made public. But this is an important step in resolving the ugly dispute that has erupted between the intelligence committee and the intelligence agency.
    The dispute presents two very serious questions. Was the program consistent with American values and did it produce valuable intelligence? And is effective congressional oversight of secret activities possible in our democracy?

    April 15, 2014

  • Los Angeles Times: Congress extend jobless benefits again

    How’s this for irony: Having allowed federal unemployment benefits to run out in December, some lawmakers are balking at a bill to renew them retroactively because it might be hard to figure out who should receive them. Congress made this task far harder than it should have been, but the technical challenges aren’t insurmountable. Lawmakers should restore the benefits now and leave them in place until the unemployment rate reaches a more reasonable level.

    April 14, 2014

  • Many nations invested in Israel

    Former Israeli Ambassador to the United States Yoram Ettinger recently spoke to a gathering at the Chabad Center for Jewish Life and Learning in Oklahoma City. The event began with a presentation by Rabbi Ovadia Goldman, who told the attendee that the  upcoming Jewish holiday of Passover was an occasion for them to embrace the children of God, which is all of humanity.

    April 14, 2014

  • Coming soon: More ways to get to know your doctor

    Last week, the federal government released a massive database capable of providing patients with much more information about their doctors.
    The Centers for Medicare and Medicaid Services, the government agency that runs Medicare, is posting on its website detailed information about how many visits and procedures individual health professionals billed the program for in 2012, and how much they were paid.
    This new trove of data, which covers 880,000 health professionals, adds to a growing body of information available to patients who don’t want to leave choosing a doctor to chance. But to put that information to good use, consumers need to be aware of what is available, what’s missing and how to interpret it.

    April 14, 2014

  • HEY HINK: Hateful bullies attempt to muffle free speech

    Hopefully we agree it should be a fundamental right to voice criticism of any religion you wish. And you should have the right to sing the praises of any religion you choose. If criticism of religion is unjust, feel free to make your best argument to prove it. If criticism is just, don’t be afraid to acknowledge and embrace it. If songs of praise are merited, feel free to join in. If not, feel free to ignore them. But no American should participate in curbing free speech just because expression of religious views makes someone uncomfortable.

    April 11, 2014


Do you agree with a state budget proposal that takes some funds away from road and bridge projects to ramp up education funding by $29.85 million per year until schools are receiving $600 million more a year than they are now? In years in which 1 percent revenue growth does not occur in the general fund, the transfer would not take place.

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