Republicans are poised to pass another reduction in the state income tax this coming legislative session, and it’s probably wishful thinking that somehow they can be stopped from further decimating government programs and educational systems in their quest to transfer more wealth to the super rich.
The fix is in. How can anyone refuse the Republicans’ incredulous offer to lower taxes with no or limited immediate repercussions? Those who oppose a further reduction in the income tax at this point-like myself-can argue that more cuts in state government, which means less services, will hurt the most vulnerable: the poor, the elderly and school children. But that argument hasn’t resonated among Oklahoma voters, a solid majority of whom have bought into the conservative worldview of so-called limited government and trickle-down economics.
Last Friday, right before the holiday, an Oklahoma Senate task forced called for a reduction in both the income tax and the corporate tax. Here’s a key paragraph in a press release that was issued Dec. 30:
The report includes recommendations on reforms which will enable reductions in the top income tax rate from 5.25 to 4.75 percent over a two-year period as well as reducing corporate income taxes from 6 to 5 percent. Additional recommendations would offset those reductions through the elimination of select tax credits and a thorough review of existing tax preferences with an expectation of reduction or elimination of a number of tax credits.
The release didn’t outline the offsets, but the Oklahoma Policy Institute noted the proposed elimination of tax credits would affect “hundreds of thousands of taxpayers below a certain income level in order to offset regressive sales and property taxes. They would also end the personal exemption, which reduces the tax liability for every household in Oklahoma.”
As Gene Perry writes on the OK Policy Blog:
This proposal is a bad deal for hardworking Oklahomans. Doing away with broad-based tax benefits like the personal exemption, earned income tax credit, and sales tax relief credit in exchange for a cut in the top income tax rate would actually increase taxes for a majority of Oklahomans. This would hit hardest the poor and middle class families who are struggling most to make ends meet in a tough economy.
In other words, the proposal would essentially raise taxes on the poor and middle class to give yet another tax cut to the state’s most wealthy residents, who have seen their taxes lowered dramatically on the state and federal levels in recent years. The Republicans, of course, will never openly concede their basic plan is to take money from the poor to give to the rich. They only justify the plan in euphemistic terms: it will boost the economy, it will lead to economic development, it will create more jobs. None of this is certain.
In his recent newsletter, State Treasurer Ken Miller, a Republican, seems to argue for prudence when it comes to eliminating the income tax. He writes, “. . . the serious dialogue on tax reform is just beginning . . .” But this prudence-and that might be wishful thinking, too-is countered by Gov. Mary Fallin’s recent statement that she, too, wants to eliminate the state income tax.
The Republicans here talk about protecting “core services” as they cut taxes for the rich, but that’s a term loaded with plural definitions and is directly countered by GOP standard limited-government rhetoric.
Right now, it seems almost certain the Republicans, no doubt joined by some of the dwindling number of Democrats in the legislature, will pass an income tax reduction next session that primarily benefits wealthy Oklahomans. The only plausible events that could stop them at this point is if the state experiences a sudden, drastic drop in tax revenues, which isn’t likely, or if the state’s corporate power structure opposes the plan in the same way it united to oppose TABOR a few years ago.
Perhaps, a wild card is the potential of the Occupy Wall Street movement this spring to help jar people into paying attention to the increasing wealth disparity between the richest 1 percent of people in this country and everyone else. But, again, that’s probably wishful thinking.