Counterpoint: Scrapping tax won’t help economy

the last few months several legislators joined with the Governor’s Task
Force on Economic Development to urge Oklahoma to gradually eliminate
the state’s personal income tax over the next 10 years. Consequently, it
would not be a surprise if legislators will be asked to vote on the

the evidence indicates that eliminating the personal income tax will
not benefit the Oklahoma economy or Oklahoma families.

While the plan’s proponents claim
that eliminating the personal income tax would help Oklahoma to better
compete with Texas, the latest economic data shows that Oklahoma is
already competing just fine. For example, over the last 10 years,
Oklahoma’s per capita real gross domestic product has grown at the 15th
fastest pace in the nation and faster than six of the nine states
lacking a personal income tax.

During the same time
period, Oklahoma’s per capita personal income has grown at the 11th
fastest pace in the nation — again faster than six of the nine states
lacking a personal income tax.

of all, Oklahoma’s median household income has grown at the
fourth-fastest pace in the nation, and faster than all states lacking a
personal income tax. Furthermore, with each of these metrics the
Oklahoma economy is beating Texas.

the personal income tax won’t benefit most Oklahoma families, either.
To offset the lost revenue, state officials will be forced to raise
other taxes (as the Governor’s Task Force suggested). However, these
other taxes — primarily sales and property taxes — shift the tax burden
more onto the poor and middle class.

For example, according to
the nonpartisan Institute on Taxation and Economic Policy, the
middle-income quintile in Texas — the middle class — faces a tax burden
(taxes as a percentage of income) that is nearly three times the burden
faced by the highest-earning 1 percent. The poorest quintile fares even
worse, with a tax burden more than four times the level paid by the
highest-earning 1 percent. Such a transition would hardly be good news
for Oklahoma families living dayto-day, week-to-week and

more one examines the evidence, the more it seems that instead of
Oklahoma trying to be more like Texas, perhaps Texas should try to be
more like Oklahoma.

Read Jonathan Small’s argument “Phase out state income tax.”

Hepner is dean of the College of Business Administration at the University of Central Oklahoma.

Opinions expressed on
the commentary page, in letters to the editor and elsewhere in this
newspaper are those of the author and do not necessarily reflect the
opinions of ownership or management.

Mickey Hepner

This material falls under the archives category because it was imported from our previous website. It will eventually be filtered into the proper category as time allows.

Related posts



WordPress Lightbox