Why can’t GOP legislators simply set aside tax-cut proposals for this session and wait until next year to assess the economy and determine what impact a cut might have on the state budget?
That would be the prudent course of action. It would be responsible governance after years of budget cuts to education in this state. No one is rallying at the Capitol for a tax cut. The tax-cut proposals presented so far only really benefit the wealthiest in our state. The last time I checked, our state’s millionaires, well, were still millionaires and doing all right financially.
What we have now at the Capitol is a repeat of last year when House and Senate members failed to agree on a tax-cut approach. I hope it all falls to pieces like last year and ends in a stalemate, but the more sensible course of action would be for legislators to just agree to delay any cut until the overall national economy fully recovers and get serious about eliminating unneeded tax credits for corporations.
Here’s where we stand: Gov. Mary Fallin’s simple plan, contained in House Bill 2032, to reduce the top income tax rate from 5.25 to 5 percent without offsets has now been recrafted by the Senate Finance Committee. The new proposal would lower the tax rate from 5.25 to 4.95 percent in 2015 and limit the transferability of some tax credits.
It’s not difficult to see the new proposal as a direct retaliation to the House where a committee voted down a previous Senate proposal that also delayed a tax cut and dealt with tax credits and deductions in the state’s tax code. The arguments between the House, Senate and Fallin’s office might well doom any tax-cut proposal. That’s good. But it could also lead to impulsive, last-minute legislating that could harm the state for years to come. That’s not so good.
Much like Fallin’s proposal, the new Senate offering makes little sense. Fallin’s proposal is simply a tax cut for a tax cut’s sake, reducing state revenues by $120 million annually just to proclaim look at us, we’re Republicans, and we cut taxes for rich people. The new Senate proposal begs the question: Why vote on a delayed tax cut when you can just wait until next year and accomplish the same thing?
The Oklahoma Policy Institute, a state think tank, issued a statement about the new Senate plan that included this: “If we set aside a tax cut for now, lawmakers would still be free to approve one next year or to prioritize other investments, depending on the state’s situation. It is irresponsible to make tomorrow’s decision today.”
I don’t want to denigrate the overall approach to tax reform by state Sen. Mike Mazzei, a Tulsa Republican and chairman of the Senate Finance Committee. I’m opposed to any tax cut right now, but tax-code reform and modernization, if done responsibly and fairly, could add to state revenues and make any tax cut easier to absorb.
The larger issue remains the conservative quest to eliminate the state’s income tax, which has become a holy grail created by ideology not logic. Is it even possible to eliminate the income tax in a small state like Oklahoma without raising regressive sales taxes or other taxes that would only make our impoverished citizens here even poorer?
The state faces many problems, from inadequate education funding to pressing infrastructure needs. The state Capitol building is literally crumbling before our eyes, and there’s no will among the GOP to do anything about it. A small, token tax cut should be placed on hold this session. Let’s deal with our problems first.