A Problematic Tax Cut
Oklahoma lawmakers passed an irresponsible tax cut this week that primarily benefits the state’s wealthiest residents.
The cut was touted as “much needed tax relief to families” in a legislative media release, but the reality is that only the richest in the state will see any real benefit. If lawmakers really cared about families here, they would actually raise taxes on the wealthiest 1 percent in order to cut taxes for the middle class and appropriately fund public schools. What's a middle-class family going to do with an extra $50 or so per year? How much "relief" is that going to bring about.
The Oklahoma Policy Institute issued this statement about the cut:
Today House members have ignored the wishes of most Oklahoma voters and the best evidence for what helps Oklahoma’s economy. They approved tax cuts that will do little to nothing for most families while taking over $250 million out of schools and other important foundations of our economy. They voted for automatic tax cuts for future years even though the Tax Commission can’t say how much it will cost and we have no projections of what our budget needs will be.
The cut reduces the top income tax rate from 5.25 to 5 percent in 2016 and then later to 4.85 percent. The cut is dependent on revenue growth.
Meanwhile, the state has pressing funding needs. There have been steep cuts in education funding since the economic downturn. Many state employees have gone without raises for several years. The state Capitol building needs major repairs. The budget faces a $188 million shortfall. A tax cut certainly isn’t a solution to any of these problems.
Meanwhile, the idea of instituting tax cuts for the future just doesn’t make much sense. Why not just wait until 2015 to determine 2016 budget needs? What will next year’s legislature do with taxes? Obviously, the tax cut is driven by election-year politics in an extremely conservative state.
Republicans, who hold all statewide offices and massive majorities in the legislature, continue to ignore the state’s pressing needs.