Thursday, March 02, 2017

Rep. Faught: Tax hike is not the answer

Tax hike is not the answer

It seems like everywhere I go someone is talking about taxes. It’s impossible to watch TV without seeing a commercial about filing your personal income taxes. When I drive around town there are an abundance of yard signs advertising tax preparation services. Some signs actually list how much money you should get back on an “earned income credit” per child, even if you do not have any earned income.

The vast majority of state funding comes from taxes in one form or another. Income tax, sales tax, licensure fees, ad valorem, property, gross production... the list of the different taxes payed by our citizens or businesses in Oklahoma seems endless.

In her State of the State address earlier this month, Governor Fallin presented a plan that would add sales tax to 164 different categories of services provided by Oklahoma small businesses and entrepreneurs. By the Governor’s own estimate, this would result in a tax hike of over $1.7 Billion. That comes to approximately $433 per year for every man, woman and child in Oklahoma. Can you afford that?

Consider this: new taxes will be levied on haircuts, cable TV, dental cleaning and visits to the doctor, lawn mowing, oil changes, internet, manicures, real estate transactions, house remodeling, plumbing and electrical repairs, utility services (water, gas, electric), trash pick-up, pet grooming, daycare, funeral services… and this is just the tip of the iceberg.

A new tax on services will impact everyone, and it will cause significant damage to the small businesses across Oklahoma that form the backbone of our economy.

I’ve owned a carpet cleaning and restoration company for almost 30 years. Like many service businesses, our work is performed on location at customers’ homes or businesses, rather than out of a storefront. My company has current customers in at least 71 different sales tax jurisdictions.

If the Governor’s plan were to be enacted, our technicians would need to determine precisely which tax rate to apply on each job, depending on whether the customer was located inside or outside the city limits and on which county they were in. To complicate matters, the technician would also need to know if the individual or organization is tax-exempt.

Then comes the reporting period where each community and county tax must be calculated and submitted, in addition to the state’s share. The sheer volume of paperwork, logistics and headaches this would add to small businesses would be a tremendous burden, and would cause them to not expand, not hire additional employees, or possibly even close their doors, resulting in a loss of jobs in every community.

This new tax may solve one temporary problem, but it creates a bigger, permanent issue in the process. Rather than helping Oklahoma’s economy, this proposal adds to the workload, costs consumers more, and creates more roadblocks to success. Revenue sources must be found in order to meet our state budget commitments, but this can be done by targeting the burgeoning list of corporate tax credits and subsidies, by addressing excessive salaries of government administrators, and identifying waste and duplication in our agencies. Tough times call for tough measures, but a historic tax hike during an economic recovery is not the right move.


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