Another Tax Plan For Oklahoma’s Wealthy?

Image of Lance Cargill

Eliminating some unwarranted tax credits and exemptions may be a worthy endeavor, but promising an income tax cut based on it without really knowing what should and should not be cut is irresponsible. Oklahomans deserve better, but they are not going to get it this legislative session.

Oklahoma’s House Republicans, led by Speaker Lance Cargill of Harrah, pictured right, announced this week they would try this upcoming legislative session to cut just over a quarter percent on the income tax rate to just under 5.25 percent, according to a media report.

The money would be offset by eliminating some tax exemptions and credits, according to Cargill. He said this would make the action revenue neutral. Under this logic, eliminating tax exemptions and credits would not raise taxes—the legislature must pass tax increases by three quarters of a vote—because the income tax cut would replace the increases. A scheduled reduction in Oklahoma’s income tax rate will not go into effect as planned because of a lack of decent growth in state revenues.

At least one Democrat, state Rep. Joe Dorman (D-Rush Springs), disagrees with Cargill on the revenue neutral issue, but the real problem here is that Cargill has no real plan, only the same hollow Republican rhetoric we have heard for years and years in this state.

Here are the obvious questions: What particular tax credits and exemptions will be eliminated? Will the elimination of these credits and exemptions primarily affect middle-class or wealthy people? (Because this is a GOP initiative, I would bet the elimination of credits and exemptions will take away money primarily from middle-class people.) Should recent reports showing declining revenues make legislators from both parties, as Gov. Brad Henry has argued, use “extreme caution” when considering tax cuts this year? Should the recent slowdown in the national economy and the housing market crisis affect tax legislation this year?

The point here is Cargill and the GOP and their propaganda ministry, The Daily Oklahoman, need to be upfront and specific about any tax proposal so people know what is going on, and Oklahomans need to stop selling away adequate funding for education and other important segments of state government for the brief, one-time Wal-Mart sprees they get when the legislature cuts taxes. The state’s wealthiest people have benefited the most from recent tax cuts, and they are almost certain to benefit the most again if Cargill and the GOP have their way.

Does the Oklahoma tax system need comprehensive changes? Would it help people here and the overall economy to eliminate the income tax and raise taxes elsewhere? (Texas, for example, has no income tax, but has higher property taxes.) That may or may not be so, but arguing for a supposed revenue neutral tax cut without fully researching the issue is irresponsible and shows again why Oklahoma has poor fiscal leadership under the Republican House majority.