Leaders have sights on wrong credits
POINT OF VIEW |
Oklahoma’s massive budget shortfall means that lawmakers face stark choices this year. They can choose devastating cuts to Oklahoma public schools, health care and other essential services. Or they can shore up the state’s finances and invest in a stronger economy and brighter future for Oklahoma.
The second course is the most reasonable. To save our most important public investments, the money will have to come from somewhere. One promising avenue is to suspend or reduce unproductive tax breaks for businesses and special interests. Unfortunately, state leaders have decided to target a very different kind of tax program. They are threatening our state’s most important broad-based tax credits for families that work hard for low pay.
Oklahoma offers three modest tax credits that primarily support working families. These are the Earned Income Tax Credit, which is designed to encourage work; the Sales Tax Relief Credit, which supports basic nutrition and helps alleviate Oklahoma’s sales tax on groceries; and the Child Tax Credit, which strengthens families caring for children. These credits help more than 400,000 households — more than 40 percent of Oklahoma families. For many, they provide just enough breathing room in the family budget to meet basic needs and avoid other forms of assistance. They help reduce some of the imbalance in a state and local tax system that already calls on those who make the least to pay the biggest share of their income in taxes.
Oklahomans strongly oppose ending these broad-based credits. A recent poll by Global Strategy Group found that 59 percent of registered Oklahoma voters oppose ending the credits to reduce the budget shortfall, compared with just 29 percent who support doing so. Voters preferred solutions like accepting federal dollars for health care and rolling back some of Oklahoma’s cuts to the income tax rate paid by the wealthiest households.
Despite the clear message from voters, the latest budget plans from legislative leaders and Gov. Fallin would do the opposite of what voters want. They would do nothing to roll back or even delay Oklahoma’s income tax cuts for the wealthiest. But they would significantly reduce or eliminate entirely the broadbased tax credits for regular families. Ending the broad-based credits would shift taxes onto those families who were largely left out of Oklahoma’s income tax cuts. For example, the Legislature’s proposal would mean a $180 tax increase for a couple with two children making $35,000. The same family got just $9 from this year’s income tax cut.
The parents who are working hard in low-wage jobs already bear the brunt of the damage when Oklahoma cuts education funding, slashes health care benefits and reduces other important public services. When a tornado blows through, we don’t tell the families who lost their homes to lead the recovery effort. Likewise, Oklahoma lawmakers should not rely on taking from families with the leanest household budgets to fix the state’s revenue problems.