Weekly Opinion Editorial
HIDE THE PEA!
by Steve Fair
to the U.S. Bureau of Labor Statistics, the average Oklahoma family spends
about $240 per week on food. Oklahoma
citizens are paying about $600 in state sales tax each year when they buy
groceries. Last week, Oklahoma Governor
Kevin Stitt signed HB #1955, which will eliminate the 4.5% state sales tax on groceries. It will not go into effect until August
2024. The grocery sales tax cut is estimated
to reduce state government revenue by $418 million.
Governor Stitt and Speaker of the House Charles
McCall, (R-Atoka), are advocating a ¼% reduction in the state income tax, but
Senate President Pro-Tempe Greg Treat, (R-Edmond) says the Senate won’t agree
to that proposal this year. Three
eliminating the grocery tax makes sense.
Oklahoma is one of only thirteen states still taxing food. Because
people have to eat, taxing food tends to hurt poor people more than the
rich. Poor people spend a larger
percentage of their income on food.
Texas, New Mexico and Colorado don’t tax food, Kansas is eliminating
their grocery tax, and Arkansas taxes food at 1.25%. This action just gets
Oklahoma in line with bordering states.
Oklahoma have been lobbying the legislature for years to stop taxing food. In the late 1990s, former State Rep. John
Sullivan, (R-Tulsa) ran a bill for three straight sessions to eliminate the tax
on food. With tax and spend Democrats in
the majority, Sullivan’s bill received little traction. During the push by Republican in the early
2000s to win legislative races, elimination of the grocery tax in Oklahoma was
a mainstay on most candidate push cards and campaign material. It took just 25 years, but Republicans
finally fulfilled the promise.
will still pay sales tax on food.
HB#1995 eliminated only the state portion of the sales tax (4.5%). Municipalities, cities and counties will
still assess tax on food. In many cases,
that amount is as much as 5.5%. Those
entities are not likely to follow the state’s lead in removing the tax on food,
because they depend on the tax revenue to provide basic services.
Third, a consumption
tax is a fair way to tax. The grocery
tax was a consumption tax. A consumption tax taxes people when they spend
money. The state (and Federal) income
tax is assessed when you earn money, or get interest, dividends, or capital
gains. Consumption taxes are paid as
retail sales tax, excise tax, use tax and import duties. It isn’t
regressive and has few ‘loopholes’ or codes.
Consumption taxes encourage saving and not spending.
government will still get a large percentage of revenue from sales tax. The state gets a large amount of funding by taxing
the oil industry (gross production tax).
Governor Stitt wants to eliminate the state’s 4.25% state income tax. If that is done, how will Oklahomans fund state
government? Where would state government
get money? Will Oklahomans give up basic
services to pay less taxes? Is Oklahoma state
government so bloated that state employees and services can be eliminated and
no one notice? Probably not.
likes taxes, but they are a necessary evil.
Knowing when you are paying tax is crucial and Oklahoma just eliminated a
transparent one. The grocery tax was the
devil you knew. No one liked paying grocery tax, but they understood it- it wasn’t
hidden. Will state government have to make
up the loss of $418 million each year, and if so how? Taxpayers beware! Let the hide the pea game