An analysis of Gov. Mary Fallin’s proposed income tax cut proposal shows that Oklahoma’s wealthiest households will benefit the most while 41 percent of its residents will get no benefit at all.
The overall average tax cut would be a paltry $29 while those in the top 1 percent in income would receive an average of $2,009.
The analysis, prepared by the Institute for Taxation and Economic Policy (ITEP) and distributed by the Oklahoma Policy Institute, clearly shows Fallin’s proposal is primarily designed to reduce the tax burden for the wealthy at the expense of the poor and middle class.
In her State of the State speech earlier this month, Fallin proposed cutting the top income tax rate from 5.25 to 5 percent despite the fact that Oklahoma faces a $170 million budget shortfall and has cut per pupil spending on a percentage basis more than any other state in the nation since 2008.
The regressive tax cut would mean a $135 million annual loss in revenue, according to OK Policy, while 41 percent of Oklahomans wouldn’t get a break at all because they aren’t taxed at the top income rate.
The arguments justifying the proposed cut are based on fallacious claims that it would drive economic development or that Oklahoma needs to be competitive with neighboring states with lower tax rates. There is no actual empirical evidence or specific studies related to Oklahoma that show this is actually true. Thus, it’s not difficult to view the proposed cut in pure class terms. The rich will benefit greatly; the poor will not benefit at all. The middle class gets a token cut.
The Oklahoman editorial board tried to justify the proposed tax cut in a larger perspective, but its right-wing blinders failed to produce a valid argument. This is from a recent editorial supporting the cut:
It’s also true that the more money you earn, the more money you save when the tax rate is cut. That’s just basic math. This doesn’t mean the rich are getting a bigger tax cut than the middle class. The rate reduction would be the same for both. Instead, it means the rich have more money than the middle class and pay more in taxes, which isn’t breaking news. They will pay more in taxes regardless of the rate.
This is a tired argument. Yes, the rich pay more in taxes because they are rich. Everyone gets that. Why repeat the obvious? It’s like saying, “The rich are rich. They have all the money.” To use italics just like The Oklahoman editorial, We know that. The point is the flat rate reduction doesn’t benefit thousands upon thousands of Oklahomans at all and only gives a small cut to many other Oklahomans. Why not RAISE the tax rate on the top 1 percent and lower the rate for others? Obviously, Fallin and The Oklahoman would scoff at this progressive idea, but at least it gives us something to debate rather than just listening to wishful thinking about economic development and reading another ad nauseam lecture about the intrinsic wonderfulness of rich people.
Along with her proposed tax cut, Fallin wants steep budget cuts to higher education and the Oklahoma Health Care Authority. This will ensure the state will continue to have a low college graduation rate and that the poor will continue to have limited medical care options.
Dumb? Unhealthy? For decades, these have been the sweeping and one might argue unfair stereotypes of Oklahomans from some people who live in other sections of the country and world. Fallin’s proposed tax cut wouldn’t change that at all.
Republican lawmakers and leaders this legislative session are pushing for retirement benefit cuts for newly hired state employees.
They have declared yet another false crisis, pointing to the state pension programs’ total unfunded liability of $11 billion, but they aren’t talking about how that liability has declined from $16 billion since 2011. Why not just stay the course until the pensions are solvent? There’s no real emergency.
The first GOP gambit is to no longer offer new state employees under the Oklahoma Public Employees Retirement System a defined-benefit pension plan. Instead, they would be placed in a 401(k)-style retirement benefit plan.
Both a Senate and House committee have passed measures that would essentially reduce pension benefits for new hires starting in 2015, but that is only the first step in the GOP’s attack. For now, teachers and public safety employees have been spared, but that will change unless people speak out.
Gov. Mary Fallin is an enthusiastic proponent of the so-called “reform,” arguing that it’s fiscally sound given the unfunded liability and will allow new employees more flexibility in managing their retirement benefits, but she and other state leaders have not offered a clear financial analysis of its impact on those who remain in the old plans.
Here’s the bottom line: The GOP leadership obviously wants to cut retirement benefits for state employees, but they won’t come out and admit it in those clear terms.
State Rep. Dick Morrissette, an Oklahoma City Democrat, is one of the few political leaders in the Republican-dominated Legislature standing up for state employees, many of whom have gone without a raise for seven years. In response to a House bill cutting pension benefits for new hires, Morrissette said:
The proponents of pension reforms are crying that the sky is falling and that these reforms will make vast improvements to the pension system. What they are not showing is the fiscal impact of these reforms. The documents associated with the bill actually say that no fiscal impact is necessary. They are making a fiscal argument without really setting out the numbers for us. I think these bills are bad policy and I think their proponents have not even attempted to make a good case for their approval.
Why are we trying to fix a system that isn’t broken? There are examples of failed reforms in other states that should serve as a clear warning to us. Taxpayers and state employees are better off with the current system than the system these bills will create.
I have long made the argument that many highly skilled and talented state workers don’t seek jobs in the private sector that offer much higher wages because of guaranteed retirement benefits, which aren’t even necessarily that generous. The state will have a difficult time recruiting and retaining such workers in the future if the changes are signed into law.
Meanwhile, Fallin is pushing for an income tax cut even though the state faces a $170 million budget shortfall. The wealthiest Oklahomans would benefit the most under Fallin’s plan to reduce the top rate from 5.25 to 5 percent.
Oklahoma City Mayor Mick Cornett’s refusal to debate challenger Ed Shadid in his reelection bid shows he has little respect for the basic democratic process and is most likely afraid he would shred votes if he talks about issues beyond sound bites and advertisements.
Ward 2 Councilor Shadid, a local physician, pictured right, has called for the debates among the mayoral candidates, which also include Phil Hughes and Joe B. Sarge Nelson. Shadid and Cornett are the frontrunners in the election, scheduled for March 4.
Cornett, a former television sports reporter and anchor, has come under fire before from Shadid and others for his secretive approach to city governance, which seems dominated by corporate interests and a fixation on improving downtown and expanding Bricktown for their financial benefit. The losers in this governance style, according to Cornett’s critics, are the city’s numerous neighborhoods and the basic crime safety of its citizens.
Cornett has made the claims of secretiveness seem especially valid now that he has refused to debate. In a statement, Cornett said he didn’t want to debate because he is “the only candidate conducting a positive campaign focused on the issues.” Even if that were true, which it isn’t, it’s still not a valid reason to refuse to debate. Shadid has raised issues that challenge Cornett’s narrow, rosy view of the city, and that’s just the point. Oklahoma City residents absolutely deserve to hear the different viewpoints.
It’s as if Cornett wants to undermine the basic democratic process because he might get his feelings hurt when someone doesn’t agree with him or, in other words, isn’t “positive” enough about the city’s high crime rate and shortage of police officers. Don’t elections usually pit people against one another because of disagreements?
As far as I can tell, Cornett is getting little pushback from the local corporate media about his decision, especially from The Oklahoman, which for all practical purposes is a de facto part of Cornett’s campaign apparatus. At least the newspaper reported Cornett’s decision and extremely weak excuse, but a credible metropolitan newspaper would have immediately pushed for debates.
One issue that has come up in the election, and it’s one Cornett probably doesn’t think is “positive,” is the lack of diversity among his appointees to various city boards, commissions and trusts.
The Shadid campaign, for example, reports that since 2004 only 22.8 percent of Cornett’s appointees have been women even though they outnumber men in Oklahoma City 51 to 49 percent. The campaign also notes that out of the 1,117 appointments, only 35 have been African American, only 13 have been Hispanic American and only one has been Asian American.
For anyone who believes in basic fairness and diversity, this isn’t “positive” news at all, of course, but it IS an issue that should be debated.
Cornett is probably worried that some city groups, especially the local gay community, want to know his stances on diversity and tolerance, especially given his appointee record and this advertisement from his 2006 Congressional campaign:
Contrast that spot with this one from Shadid:
The question, then, becomes whether Cornett believes you have to hold narrow and archaic views here in central Oklahoma to be considered “positive.” If you believe in diversity, women’s rights and equality, then that isn’t “positive,” right?
The bottom line is that, for now, Cornett is making a calculated political decision not to debate, banking that his name recognition, his incumbency and ultra-conservative views will assure him victory. That’s a strategy that can work well in a statewide or Congressional election here in Oklahoma, but it could clearly backfire in a low turnout city election.