Sunday, March 3, 2024

It took 25 years, but Republicans finally fulfilled the promise to eliminate food tax!

Weekly Opinion Editorial


by Steve Fair


     According 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 observations: 

     First, 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.

    Citizens in 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.

      Second, Oklahomans 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.  

     Oklahoma 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. 

     No one 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 begin!    



James said...

Steve, you have really outdone yourself with this one. I mean, a Republican talking about taxes is about as patriotic as the American political system can be. Sure, there are more pressing issues facing the country as a whole, such as the wars in Israel and Ukraine, the 91 charges filed against the Republican former president and 2024 front-runner, and IVF rights, but you have chosen to focus your attention on what the people really care about, which is paying pennies on the dollar for Flamin' Hot Cheetos and Pop-Tarts so that our great state can have the funds it needs to support its departments.

Okay, yes, it goes beyond that. I am being more than a little facetious here, but I expect you to take that as a granted given how long I've been hounding you, Steve. You see, I'm not talking out of my rear end, nor am I speaking from a one-sided podium of my values versus yours. In fact, I found the first few paragraphs of your post to be agreeable on the surface. It was only when I kept reading that the disagreements really settled in.

You see, Steve, the "hide the pea game" is not so much about allocating government funds as it is about appeasing the electorate. "Lower taxes", says the big person in charge, "and we will fight for the working class." Bull crud.

You should know just as well as I do that any increase in government-mandated cost beared on a corporation will only lead to higher prices for the consumer. Is that fair? Absolutely not, and I am not subject to the argument that corporate expenses be passed down to the consumer via price increases. People of any political affiliation, specifically those in your party's circle, have time and time again placed the causes before the effects when seeking office. Our legislative branch needs to close corporate loopholes to prevent increased inflation, not shift operational expenses to a different cell on the budget spreadsheet.

We have a strong economy under Biden, and that's just something that the statistics prove. Whether it is because of Biden or some combination of his and Trump's policies may be up for debate, but the American public will look at that economy and its strong resilience to pressures like war and disease and analyze for themselves who they should vote for.

NathanBeets said...

It would seem that someone believes people cannot wipe their own backside without some government service. I would definitely give up these so-called “basic services” to pay less in taxes. We do not need the services of the government to live our lives as we see fit. We already have useless services that tax everything from what we sell to what we buy and to what we make.
The state will always find a way to bring in more and more money for itself. Out government should be for the people, not for the profit of the state
Our government is beyond bloated: it is morbidly obese. We cannot do anything, anywhere without paying some ridiculous tax, such as holding a garage sale or installing new windows.
If the government needs money so badly, let them sell bonds or reduce their own wages to compensate for the loss of income.
No one in any state should have the government so heavily involved in their own private life.