Tidwell: Oklahoma’s Tax Frenzy Doesn’t Solve Our Problems, It Just Compounds Them

The following OpEd ran in the Tulsa World, February 23, 2017

Oklahoma’s tax frenzy doesn’t solve our problems, it just compounds them
By John Tidwell, Americans for Prosperity

Lt. Gov. Todd Lamb took the bold step last week of resigning from Gov. Mary Fallin’s cabinet, where he had served as the state’s Small Business Advocate. His reason? He believes Gov. Fallin’s proposal for sweeping tax hikes “will adversely harm Oklahoma’s small businesses and families.”

Lt. Gov. Lamb is absolutely right. And his resignation from the governor’s cabinet is the latest sign that these tax hikes should never see the light of day.

Gov. Fallin is proposing a bevy of tax hikes to make up for the state’s $878 million budget hole. From haircuts for you and your pup, to lawn care and cable TV service, it seems there is no end to the impending tax frenzy.

Yet rather than take more money out of Oklahomans’ wallets, Gov. Fallin and policymakers should first seek to cut wasteful programs and ensure taxpayer dollars are spent wisely. This is especially true when considering the harm tax hikes will inflict on Oklahoma families.

Gas taxes, for instance, disproportionately hurt those with limited means. The people who are most hurt by gas tax hikes are those who earn less than $50,000, according to the Brookings Institution, because they spend a higher percentage of their pay commuting to work.

Taxes on cigarettes also unfairly burden the poor, who make up a disproportionate share of the smoking population. Yet under the current proposal, lawmakers would raise nearly $250 million in new cigarettes taxes on those who can least afford it.

Cigarette taxes are also unreliable revenue streams, creating uncertainty for future years. Many smokers will either purchase cigarettes from other states or switch to alternatives like vaping. Oklahoma also spends nearly $50 million each year on programs designed to encourage people to kick the habit, which would make sure we bring in less money the next year than the previous. It simply doesn’t make sense.

There’s even talks of increasing the tax on soft drinks. These types of plans are also problematic. You have to look no further than the city of Philadelphia, which recently passed a 1.5-cents-per-ounce tax on soft drinks. That may not seem like much, but it added up to the point that a 12-pack of sports drinks cost more than a 12-pack of beer. Even tax-loving U.S. Senator Bernie Sanders opposes a tax on soft drinks given that it falls disproportionately on the poor.

The list of tax increases goes on, touching everything from foot surgery at your local hospital to a family funeral. All in all, lawmakers are proposing nearly $2 billion in new taxes. This approach is not just misguided, it’s unfair. State leaders are even proposing a utility tax on digital goods like Netflix and iTunes purchases to cover the budget hole.

Some say we’ve “cut government spending to the bone” and that tax hikes are our only option. But we must take a more innovate and creative approach to reconcile this budget. That means eliminating wasteful budget items and tax giveaways that are depriving the state of lost revenues.

A great place to start would be to eliminate special-interest tax credits for wind energy producers. These credits cost Oklahoma $100 million every year. Eliminating these special favors would level the playing field for other energy producers, giving consumers — not politicians — the ability to choose which sources we prefer.

And to prevent falling back into this budget hole again, lawmakers should refuse taking on more debt to pay for public construction projects. We already owed a staggering $44.2 billion in debt as of 2014. If we are already struggling to pay our bills, we shouldn’t keep racking up even more.

Focusing on these sorts of spending reforms would go a long way toward resolving Oklahoma’s budget shortfall. It’s a far better place to start than reaching into the pockets of Oklahoma’s small businesses and families.

John Tidwell is the Oklahoma state director of Americans for Prosperity.