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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  • Sheltons travel for better life for family

    Some time around 1865 a mixed-race African American couple, William and Mary Shelton, made their way from Mississippi to east Texas. Nothing is known for certain of their origins in he Magnolia state, or the circumstances under which they began their new lives in Texas.

    July 29, 2014

  • Film critic Turan produces book

    Kenneth Turan, who is the film critic for National Public Radio’s “Morning Edition,” has written a book “Not to be Missed, Fifty-Four Favorites from a Life Time of Film.” His list of movies span the gamut from the beginnings of filmmaking through the present day.
    There are some surprising omissions on his list. While he includes two films, “A Touch of Evil” and Chimes at Midnight” made by Orson Welles, and one, “The Third Man,” that Welles starred in but did not direct. He did not however, include “Citizen Kane,” that was the first movie Welles made, that is  often cited by both film critics and historians as a favorite film.

    July 28, 2014

  • Logan County’s disputed zone

    Watchers of “Star Trek” may recall the episode from the original series entitled, “Day of the Dove.” In this episode, Captain Kirk and his crew are forced by a series of circumstances into a confrontation with the Klingons. The conflict eventually resolves after Kirk realizes that the circumstances have been intentionally designed by an alien force which feeds off negative emotions, especially fear and anger. Kirk and his crew communicate this fact to the Klingons and the conflict subsides. No longer feeding upon confrontation, the alien force is weakened and successfully driven away.

    July 28, 2014

  • Russell leads in Sun poll

    Polling results of an unscientific poll at show that Steve Russell, GOP candidate for the 5th District congressional seat, is in the lead with 57 percent of the vote ahead of the Aug. 26 runoff election. Thirty readers participated in the online poll.

    July 28, 2014

  • Healthier and Wealthier? Not in Oklahoma

    Increased copays, decreased coverage, diminished health care access, reduced provider budgets and increased frustration are all the outcomes of the Legislature’s 2014 health care funding decisions. Unlike some years in the past when a languishing state economy forced legislators into making cuts, the undesirable outcomes this year could easily have been avoided.

    July 26, 2014

  • Medicaid reform a necessity

    Historically, education spending by the state of Oklahoma has been the largest budget item. This is no longer the case. In recent years, the state of Oklahoma spends more on Medicaid (operated by the Oklahoma Health Care Authority) than common education and higher education combined, according to the state’s Comprehensive Annual Financial Report.

    July 25, 2014

  • Remembering lessons from 1974

    This week marks the 40th anniversary of an important milestone in America’s constitutional history. On July 24, 1974, the Supreme Court voted 8-0 to order the Nixon White House to turn over audiotapes that would prove the president and his close aides were guilty of criminal violations. This ruling established with crystal clarity that the executive branch could not hide behind the shield of executive privilege to protect itself from the consequences of illegal behavior. It was a triumph for the continued vitality of our constitutional form of government.

    July 25, 2014

  • RedBlueAmerica: Is parenting being criminalized in America?

    Debra Harrell was arrested recently after the McDonald’s employee let her daughter spend the day playing in a nearby park while she worked her shift. The South Carolina woman says her daughter had a cell phone in case of danger, and critics say that children once were given the independence to spend a few unsupervised hours in a park.
    Is it a crime to parent “free-range” kids? Does Harrell deserve her problems? Joel Mathis and Ben Boychuk, the RedBlueAmerica columnists, debate the issue.

    July 24, 2014

  • Technology that will stimulate journalism’s future is now here

    To say technology has changed the newspaper media industry is understating the obvious. While much discussion focuses on how we read the news, technology is changing the way we report the news. The image of a reporter showing up to a scene with a pen and a pad is iconic but lost to the vestiges of time.
    I am asked frequently about the future of newspapers and, in particular, what does a successful future look like. For journalists, to be successful is to command multiple technologies and share news with readers in new and exciting ways.

    July 23, 2014

  • New Orleans features its own “Running of the Bulls”

    On July12, the streets of the Warehouse District of New Orleans were filled with thousands of young men who were seeking to avoid being hit with plastic bats wielded by women on roller skates as part of the annual “Running of the Bulls” that takes place in New Orleans.
    The event is based on the “Running of the Bulls” that occurs in Pamplona, Spain, that is  part of an annual occurrence in which a group of bulls rampage through the streets of Pamplona while men run from them to avoid being gored by their sharp horns. That event was introduced to the English-speaking world by Ernest Hemingway, who included scenes from it in his critically acclaimed 1926 novel “The Sun also Rises.”

    July 22, 2014


The runoff race for the 5th District congressional seat is set for Aug. 26. If the voting were today, which candidate would you support?

Al McAffrey
Tom Guild
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