If all the recent talk about tax credits and exemptions and tax reform have left you scratching your head, you’re not alone.  Keeping up with the tax debate – and its accompanying jargon and terminology – can challenge even the most committed news-and-politics-junkie.  Fortunately, this glossary of key terms from the Institute on Taxation and Economic Policy can help.  The glossary accompanies ITEP’s updated ‘Guide to Fair State and Local Taxes‘.  Print it out and keep a copy handy for the next time you need to make sense of the state’s tax policies.  The glossary includes definitions like: Read the rest of this entry »

Many state political and business leaders are clamoring to do away with Oklahoma’s personal income tax, the state’s single largest revenue source, while acknowledging the need to maintain sufficient tax revenue to fund basic services. One influential participant in the tax debate, House Revenue and Taxation Committee chairman David Dank, has made clear that he would support raising the state sales tax in order to eliminate the income tax.  Rep. Dank was quoted in February saying:

My personal preference would be to eliminate the state personal income tax entirely and replace it with consumption taxes on items other than groceries and prescription drugs, where everyone pays a fair share based on what they buy. The more money people have, the more they spend.

In Rep. Dank’s view, eliminating the income tax will draw  businesses and investors who will otherwise choose a state without an income tax, such as Texas. However, if the point of tax reform is to boost Oklahoma’s economy, our leaders should be wary of raising the state sales tax. Scrapping the income tax in favor of higher sales taxes would do many things, but none will be good for our economy.  Here are just a few ways that a higher sales tax will hurt our state: Read the rest of this entry »

What’s up this week at Oklahoma Policy Institute? The Weekly Wonk is dedicated to this week’s events, publications, and blog posts.

This week OK Policy reported on SB 517, a bill that would sunset 20 tax credits, including one relied on by 1 million low- and medium-income Oklahomans.  If Oklahoma eliminates this credit, it would put us in the company of just Mississippi and Alabama as the only states that provide no relief for grocery taxes.  The Tulsa world reported on OK Policy’s ideas for improving the tax code and adequately funding public structures.

We released the April edition of Numbers You Need this week, our monthly bulletin of key economic and budget trends, which shows a slow and steady economic recovery for Oklahoma.  For a closer look at two key indicators of economic improvement, read Tuesday’s blog post, Quick Take on the Economy: Income picks up steam, unemployment edges downward.

Despite the economic recovery and improving revenue collections, the state still faces a huge shortfall for next year.  Yesterday’s blog post explains the “5 percent option” and suggests why we think a portion of this money should be used to make up the shortfall.

On April 29, Oklahoma Assets hosts a Webinar on financial education in public schools.  Yesterday, OK Policy represented Oklahoma Assets at Jump$tart Your Money Day at the State Capitol.

Numbers of the Week

• 6.5 percent – Oklahoma’s unemployment rate, February 2011
• 103 – Drug-free infants born to drug-court participants in Oklahoma, FY07-FY09
• $7,411,299,000 – Annual payroll and receipts of Oklahoma firms with less than 20 employees, 2007
• 9 – Number of states where 30 percent or more of the population is obese, 2009; Oklahoma, Alabama, Arkansas, Kentucky, Louisiana, Mississippi, Missouri, Tennessee, and West Virginia.
• $118 million – Potential revenue generated by eliminating the itemized deduction for state tax payments on Oklahoma returns.

Click here for source citations and archived numbers of the day.

In the Know is a daily synopsis of Oklahoma policy-related news and blog posts.  You can sign up here to receive In the Know in your inbox each weekday morning and the Weekly Wonk each Friday afternoon.

As the deadline for filing income tax approaches, we return to a favorite blog post from our friend Paul Shinn that we first ran in 2009. You may also enjoy this video tribute to the many things we can be thankful our tax dollars help support.

April 15. I’m not a fan of tax day. Who is? After several tortuous weeks of determining whether I have excess distributions from my 529 plan  and deciding how much I owe to the two states I lived in last year, I’m in line at the post office to send all these forms and too many checks to too many different governments. I’ve had it. Why can’t we make society work without taxes? I’m willing to try, I think, as I dose off…

In the morning, it slowly dawns on me that I’ve awakened in a tax-free America. So far, it’s great; I didn’t need to set the alarm! No real point in taking the kids to school, if it’s even open today. I’m not wealthy, so I can’t afford one of the schools that is open five days a week, requires the teachers to have a degree, uses textbooks, and has standards about what my kids should learn during the year. When little Heather asks about whether she can go to college, I just laugh. We can’t pay the tens of thousands of tuition for a private college. There’s no grant or loan programs and womens’ sports don’t make a profit, so there are no athletic scholarships awaiting her. Child care is risky too, since nobody determines if day care operators are qualified, safe, and not just in it to find victims for something. Read the rest of this entry »

This is one of our most widely read and popular blog posts. It was written by Paul Shinn and initially ran on our blog on April 15, 2009.

April 15. I’m not a fan of tax day. Who is? After several tortuous weeks of determining whether I have excess distributions from my 529 plan  and deciding how much I owe to the two states I lived in last year, I’m in line at the post office to send all these forms and too many checks to too many different governments. I’ve had it. Why can’t we make society work without taxes? I’m willing to try, I think, as I dose off…

In the morning, it slowly dawns on me that I’ve awakened in a tax-free America. So far, it’s great; I didn’t need to set the alarm! No real point in taking the kids to school, if it’s even open today. I’m not wealthy, so I can’t afford one of the schools that is open five days a week, requires the teachers to have a degree, uses textbooks, and has standards about what my kids should learn during the year. When little Heather asks about whether she can go to college, I just laugh. We can’t pay the tens of thousands of tuition for a private college. There’s no grant or loan programs and womens’ sports don’t make a profit, so there are no athletic scholarships awaiting her. Child care is risky too, since nobody determines if day care operators are qualified, safe, and not just in it to find victims for something. Read the rest of this entry »

As the Oklahoma Legislature winds down the 2009 session, there is still talk of tax relief–a lower top income tax rate, exemptions for oil and gas drilling, and limits on property tax growth–in spite of a budget shortfall of $600 million or more. With all the reductions of  the last few years and with some of our leaders calling for further tax cuts yet, it is easy to forget that Oklahoma already is a very low tax state.

OK Policy will soon release the Online Guide to Oklahoma Budget and Taxes. It offers a comprehensive look at government spending, revenues, budget processes, and important policy issues Oklahoma faces in  the years ahead. The Guide uses plain English, clear graphs, and an easy navigating system so readers can find out what they need in a hurry, or examine a subject in greater depth.

Read the rest of this entry »

April 15. I’m not a fan of tax day. Who is? After several tortuous weeks of determining whether I have excess distributions from my 529 plan  and deciding how much I owe to the two states I lived in last year, I’m in line at the post office to send all these forms and too many checks to too many different governments. I’ve had it. Why can’t we make society work without taxes? I’m willing to try, I think, as I dose off…

In the morning, it slowly dawns on me that I’ve awakened in a tax-free America. So far, it’s great; I didn’t need to set the alarm! No real point in taking the kids to school, if it’s even open today. I’m not wealthy, so I can’t afford one of the schools that is open five days a week, requires the teachers to have a degree, uses textbooks, and has standards about what my kids should learn during the year. When little Heather asks about whether she can go to college, I just laugh. We can’t pay the tens of thousands of tuition for a private college. There’s no grant or loan programs and womens’ sports don’t make a profit, so there are no athletic scholarships awaiting her. Child care is risky too, since nobody determines if day care operators are qualified, safe, and not just in it to find victims for something.

Being a product of the same education “system,” I don’t have a job today. There’s such a glut of unskilled workers like me that we are lucky to get occasional day labor in dangerous jobs where we may or may not actually get paid for our work at the end of the day. There’s hope for more job options, however, since Mexico, India, and China are outsourcing more simple jobs to the U.S. due to our lack of labor and  environmental protections.

Read the rest of this entry »