Lawmakers Voice Renewed Concerns About Effect of Tax Cuts

Lawmakers have raised new concerns about the effects of proposed tax cuts being considered in the Oklahoma Legislature following statements from the Speaker of the House. Sen. Jim Wilson, Rep. Debbie Blackburn and Rep. Joe Eddins disagree with recent comments from the Speaker who claimed that only a minority of the state is in opposition to the tax cuts and that the permanent tax cuts are the best way to meet pro-growth policy goals.

"If pro-growth is the policy goal, and it should be, there are more powerful ways to achieve the goals than broad tax cuts," said Wilson, D-Tahlequah. "Logic dictates we have a public policy which encourages businesses to locate in Oklahoma and the criteria used for selection of location has everything to do with work force and both physical and social infrastructure. It has very little to do with tax rates."

Wilson noted that according to the 2004 Corporate Survey published by Area Development Site and Facility Planning, the 25 combined ratings of site selection factors for companies do not include consideration of individual taxes. It does, however, include consideration of corporate tax rates as the 6th criteria - a source which generates little revenue for Oklahoma. In addition, the combined quality of life factors considered in site selection do not include individual taxes as a consideration.

While the three democratic legislators acknowledge that the targeted tax cuts to Oklahoma's working poor and middle class have merit, they contend that the House's proposed supply side tax cuts are ineffective as a pro-growth tool.

"The proposed tax cuts are going to exceed $430 million in the next four years," explained Rep. Blackburn, D-OKC. "When we add to that the $140 million we are short for healthcare due to the failure of tobacco tax collections and the $170 million of new money we collect going to roads and bridges - our general fund deficit will be $750 million."

"It is unfortunate we are talking about tax cuts on the one hand while incurring extreme debt on the other hand," said Eddins, D-Vinita. "After all, the citizens of Oklahoma supported many of the current taxes when they overwhelmingly passed the 1017 initiatives. By a 100,000 vote margin the people said they preferred a first class education system and were willing to pay for it. Now we see an effort to undermine the intent of the people by cutting the very taxes they just recently voted for."

"The Speaker is obviously ignoring the history of the failures of supply side economics. Supply side economics are anti-growth in the long run. The theory behind supply side economics is the wealthy create jobs thus giving them additional wealth through tax breaks that will create even more jobs," Wilson noted. "But this doesn't work and it doesn't work because the wealthy do not create jobs - consumers create jobs."

Wilson believes that Speaker Hiett is using tax cuts to gain popularity and votes but reminds citizens that because of term limits he will not be around to deal with the devastating consequences of his tax cuts.
"His tenure limits his perspective and his tax cuts will limit Oklahoma's future economic growth," Wilson concluded.