Weekly Opinion Editorial
THE
DEVIL YOU KNOW
by Steve Fair
Oklahomans pay property tax administered at county
level. Property taxes are a funding
source for local services like public schools, county government, career tech,
and rural firefighting. About 70% of
property tax paid in Oklahoma goes to education. The amount of property tax is determined by
the value of a property's fair market value, assessment ratio, any exemptions,
and the local millage rate.
State Senator David Bullard, (R- Durant) has introduced Senate Joint Resolution #23.(SJR23) aka the 'Ad Valorem Reform Act of 2026,." aka SQ#841. Bullard is proposing Oklahoma voters be given the chance to vote on freezing and/or completing eliminating property tax for homeowners. To make up the lost revenue, SJR23 would eliminate, he proposes citizens pay more in sales tax.
“For far too long, Oklahomans have essentially been renting their property from the government. After all, do we really own our property if we pay taxes on it?" Bullard asks.
Bullard said any changes to the tax system would
need to be implemented gradually to avoid destabilizing local budgets. “We can eliminate this unjust tax, but any
changes must be implemented slowly and carefully to ensure we don’t defund our
schools or counties,” he said. Three observations:
First, Bullard makes a good point about property tax. If a citizen's property can be seized for non-payment of taxes, does the owner truly own it? It's a good question, but not a new one. It's been debated since the founding of America. A settled aspect of the law is paying taxes is considered a reasonable condition of property ownership. Courts have consistently ruled the government has the ability to seize property for lawful debts (with due process).
SJR23 seeks to shift simply collection of the lost revenue to another place- it wouldn't eliminate taxes. It is possible citizens could pay more taxes to fund the listed entities.
Second, a consumption tax is the most transparent. With a consumption tax, citizens pay taxes when they choose to spend money. The decision on how much tax you pay is through spending habits. A consumption tax encourages savings, which boosts the economy and increases productivity and wages for all income levels.
That's the problem with an income tax. According to a study by the CATO institute, the current progressive tax system in America has the top half of income earners in the U.S. paid 97.1% of the $4.9 trillion of the federal income tax collected last year. 31.2% of Americans pay zero federal income tax. A consumption tax simplifies taxes, eliminates deductions, and loopholes, making government more transparent. But few citizens track how much sales tax they pay.
Third, Oklahoma's property tax is about average in the U.S. The Sooner state ranks #25 nationally in property tax. Oklahomans pay 0.77% of assessed value annually in property tax. Texas ranks #7 in property tax, Kansas #12, but neither of those states have a state income tax. Colorado and New Mexico have lower property tax rates- Missouri about the same. Oklahoma's tax burden is #21 in the country. The Sooner state ranks #43 in per capita income. Therein lays the problem- Oklahomans remain overtaxed and underpaid.
Three things are certain- death, taxes, and politicians talking about taxes. No one likes taxes, but making radical changes on how revenue is collected should be taken very seriously. Oklahomans may not like paying taxes on property they own, but they can see how much they pay each year. They are not likely to track how much sales tax they will pay each year to replace property tax.
SJR#23 has appeal in theory, but implementation is too sketchy. Oklahomans should probably stick with the devil they know.
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