Weekly Opinon Editorial
THIMBLERIG!by Steve Fair
Oklahoma Speaker of the House Kris Steele, (R-Shawnee) and Governor Fallin both addressed Oklahoma’s state personal income tax in separate interviews last week. Steele told Capitalbeatok.com that further income tax rate reductions are possible. “We are having some very significant discussions on how we can systematically and methodically begin to reduce our personal income tax in the state of Oklahoma. We think it’s really important. It’s really the next major policy issue that needs to be addressed to really help Oklahoma reach its potential in the area of creating an environment within our state that is conducive to job growth, job creation and job enhancement.” Steele said.
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Fallin told The Oklahoman she would favor gradually reducing the state’s personal income tax. “Our goal of reducing the income tax is to make us more competitive, but not to starve state government from the standpoint of starving essential state services for our citizens.” Fallin identified transportation, public safety, health and human services and education as core services.
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Last year, the Oklahoma state budget was 6.43 billion dollars. Education received 3.4 billion; Health and Human services 1.9 billion, Public Safety 629 million and Transportation received 208 million. That means that Fallin identified about 90% of the current state budget as essential core services. That seems a little high. There is no doubt some of those ‘core’ services should be ‘peeled’ back some.
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Currently personal income tax provides about fourteen (14) percent of the revenue Oklahoma state government receives. It is entirely feasible for Oklahoma state government to do without fourteen percent of what they currently get from taxpayers, but based on the nature of government it’s highly unlikely. Until Oklahoma state government gets serious about operating on substantially less money, then this talk of eliminating the income tax is nothing but thimblerig.
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Thimblerig, three shells and a pea or ‘the old army game’ is often sold as a gambling game, but in reality it is a con trick. A shell man begins the game by placing the pea under one of the shells and then quickly shuffles the shells around. Once the shuffling, is completed, he takes bets under which shell the pea lies. A good ‘operator’ usually has the pea palmed and so the pea is not under any of the shells.
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Politicians are masters of the shell game. They tend to hide the pea (taxes) and it’s the next to impossible task of the taxpayer to find out where it is hidden. Like thimblerig, it’s next to impossible to detect the location of ‘eliminated’ taxes once government starts shuffling the shells, but they always show up.
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The third law of Steve Fair’s laws of taxation states that forces occur in pairs. Every action is accompanied by a reaction of equal magnitude. Government never eliminates a tax- it is shifted. Government never downsizes- it grows. My apologies to Newton.
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Fallin told The Oklahoman she would favor gradually reducing the state’s personal income tax. “Our goal of reducing the income tax is to make us more competitive, but not to starve state government from the standpoint of starving essential state services for our citizens.” Fallin identified transportation, public safety, health and human services and education as core services.
*****
Last year, the Oklahoma state budget was 6.43 billion dollars. Education received 3.4 billion; Health and Human services 1.9 billion, Public Safety 629 million and Transportation received 208 million. That means that Fallin identified about 90% of the current state budget as essential core services. That seems a little high. There is no doubt some of those ‘core’ services should be ‘peeled’ back some.
*****
Currently personal income tax provides about fourteen (14) percent of the revenue Oklahoma state government receives. It is entirely feasible for Oklahoma state government to do without fourteen percent of what they currently get from taxpayers, but based on the nature of government it’s highly unlikely. Until Oklahoma state government gets serious about operating on substantially less money, then this talk of eliminating the income tax is nothing but thimblerig.
*****
Thimblerig, three shells and a pea or ‘the old army game’ is often sold as a gambling game, but in reality it is a con trick. A shell man begins the game by placing the pea under one of the shells and then quickly shuffles the shells around. Once the shuffling, is completed, he takes bets under which shell the pea lies. A good ‘operator’ usually has the pea palmed and so the pea is not under any of the shells.
*****
Politicians are masters of the shell game. They tend to hide the pea (taxes) and it’s the next to impossible task of the taxpayer to find out where it is hidden. Like thimblerig, it’s next to impossible to detect the location of ‘eliminated’ taxes once government starts shuffling the shells, but they always show up.
*****
The third law of Steve Fair’s laws of taxation states that forces occur in pairs. Every action is accompanied by a reaction of equal magnitude. Government never eliminates a tax- it is shifted. Government never downsizes- it grows. My apologies to Newton.
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When Art Laffer, of the Laffer Curve fame, came to Oklahoma last month and advocated elimination of the income tax, state leadership embraced it. Lafler rightly stated elimination of the state income tax would grow private business and help Oklahoma grow. But until Oklahoma leadership commits to downsizing state government in conjunction with the elimination of the state income tax, then this exercise is nothing more than thimblerig.
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Steele made a revealing statement during his interview. He said state revenues will increase between seven and ten percent in the coming year. But he says that still means the state budget will stay about the same. “We utilized a lot of one-time monies over the past two years to balance our state budget. There were federal stimulus monies and rainy day funds that will not be there in the next go-round. We are probably looking at a stand-still budget,” Steele said.
When Art Laffer, of the Laffer Curve fame, came to Oklahoma last month and advocated elimination of the income tax, state leadership embraced it. Lafler rightly stated elimination of the state income tax would grow private business and help Oklahoma grow. But until Oklahoma leadership commits to downsizing state government in conjunction with the elimination of the state income tax, then this exercise is nothing more than thimblerig.
*****
Steele made a revealing statement during his interview. He said state revenues will increase between seven and ten percent in the coming year. But he says that still means the state budget will stay about the same. “We utilized a lot of one-time monies over the past two years to balance our state budget. There were federal stimulus monies and rainy day funds that will not be there in the next go-round. We are probably looking at a stand-still budget,” Steele said.
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Oklahoma government doesn’t need a standstill budget; it needs a significantly smaller state budget. We need leaders who will tell bureaucrats in state agencies ‘no’ to standstill budgets. We need leaders who will force agencies to slash their budgets to the bare minimum. We need leaders who can think outside the shell.
Oklahoma government doesn’t need a standstill budget; it needs a significantly smaller state budget. We need leaders who will tell bureaucrats in state agencies ‘no’ to standstill budgets. We need leaders who will force agencies to slash their budgets to the bare minimum. We need leaders who can think outside the shell.
