Politicians’ desire to tax the ‘rich’ likely means you

LAST week when House Democrats declared a bipartisan compromise on tax increases had been reached, the governor and Republican leaders were quick to rebut it. Lost in the fuss was the fact that Democrats’ “tax the rich” rhetoric has now redefined “rich” to include all Oklahomans.

House Minority Leader Scott Inman of Del City said Democrats, the governor and Senate Republicans had agreed to more than $554 million in tax increases, including increasing the cigarette tax, the gross production tax, income taxes, fuel taxes, sales taxes on wind turbines, and sales taxes on certain services.

For the past two years, Democrats have denounced many of these same proposals, saying they penalize working families and that tax increases should be concentrated on the “rich” and energy companies.

In May 2016, when fuel tax increases were discussed in House committee, Inman said, “We know that constituents do not support this particular idea. Why is it that you are asking us to contravene the will of the voters?” In April of this year, House Democrats held a news conference to denounce fuel tax proposals, saying they harm working families.

Some Democrats have raised similar criticisms about the cigarette tax, even though it has long been part of their own budget plan. Rep. Shane Stone, D-Oklahoma City, recently wrote that the cigarette tax “enhances ongoing problems for those of us struggling to make ends meet.”

So it’s worth noting the “tax the rich” measures touted by Democrats — income tax and gross production tax increases — account for just $56.5 million of the $554.3 million in tax increases contained in their supposed “compromise” plan. That’s 10 percent of the total. Much of the rest hits Oklahomans of all walks of life.

The sales tax expansion targets “luxury” services, but these reportedly include things like automotive washing, carpet cleaning, extermination services, and land and garden services. Last time we checked, having the house sprayed for bugs isn’t a sign you’re living a lifestyle of the rich and famous.

As we’ve noted before, Oklahoma doesn’t have enough “rich” people to raise hundreds of millions in taxes without anyone in the middle class feeling the pinch. The two proposed new income tax brackets, which apply to incomes of $250,000 and up, would impact roughly 26,000 tax filers out of nearly 1.8 million statewide.

Furthermore, raising income taxes and the gross production tax creates an open invitation from income tax-free Texas for some Oklahoma-based energy companies to relocate. So the taxes on “the rich” may generate even less money than the small amount projected for the state, although they may boost U-Haul profits.

Events in Oklahoma are playing out much as they did in Kansas, where lawmakers voted this summer to increase taxes by $1.2 billion over the next two years. This included raising by more than 19 percent the income tax rate of couples earning $30,000 or less, and raising by nearly 24 percent the rate on those earning more than $60,000.

We’ve supported some tax increases, particularly on cigarettes, which would reduce smoking. But we don’t pretend only millionaires smoke.

Oklahomans are learning, once again, that when politicians talk about targeting “the rich,” they’re talking about you — no matter your income.