Mary Fallin

Right Thinking: Drawing battle lines over income tax

February 8, 2012
The Jourrnal Record
By Andrew C. Spiropoulos , Guest Columnist

If you’re the kind of person that likes to compare political debate to warfare, you’ll appreciate that one way to understand the differences between the federal and the Oklahoma legislative processes is to compare them to how World War I and the Civil War were fought.

The federal legislative process, with its year-round schedule and well-paid and -staffed full-time legislators, is like World War I: a never-ending and steady diet of constant engagement – political trench warfare.

Our state’s legislative process is more similar to the Civil War; each legislative session is like a particular campaign like those that culminated in the battles of Gettysburg or Antietam. The side that seizes the best ground is likely to prevail in battle. In our system, the governor, in her State of the State address and the submission of her proposed budget, has the first choice of political ground. That choice greatly influences the agenda of the legislative leaders of both parties and frames the debate that will drive the session.

This week, Gov. Mary Fallin chose her ground shrewdly. She has placed the power of her office behind what ought to be the chief priority of every Oklahoma political leader: fostering vibrant economic growth. By advancing only one significant initiative – the reduction and eventual elimination of the personal income tax – Fallin has made it impossible for a Legislature controlled by her own party to ignore this proposal. What we do about the income tax will be the chief story line of the session.

The governor also cleverly crafted her plan to disarm the arguments of the proposal’s chief opponents. Over the last few weeks, the tax consumers and their hired hands have unleashed their usual array of class warfare arguments, contending that the poor and working class won’t be helped by a reduction in the income tax. The governor, by proposing that the state abolish the income tax for any household with an income of $30,000 or less or an individual making $15,000 or less, has neutered the class warriors. Most people will find it hard to understand how to do better than a 0-percent tax rate.

But, make no mistake about it, the public spending lobby will continue to fight – they can’t afford not to. They will argue that some of the tax credits and exemptions the governor proposes to eliminate in order to fund the rate reduction will cost some working- and middle-class families a few dollars. No doubt they’ll be able to concoct a few scenarios in which a hypothetical family that currently qualifies for a government subsidy (because that’s all a tax credit is) will be down $50 or maybe even $100 over what they pocket now.

When that happens, ask yourself, or better yet ask the recipients, what they would prefer: a government check that might buy a couple of pizzas or a good job? That’s what at stake in this debate. Are we going to continue to have a tax system in which the politicians, using the cover of tax credits and exemptions, buy votes and campaign cash by handing out goodies to select slices of the electorate or favored industries? Or are we going to reform our tax code in order to encourage economic growth that benefits everyone?

Andrew C. Spiropoulos is a professor of law at the Oklahoma City University School of Law and the Milton Friedman Distinguished Fellow at the Oklahoma Council of Public Affairs.

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