When Ron Paul talks about repealing the income tax and replacing it with nothing, most people think it can’t be done. But at least on the state level, it can. In fact, there are nine states, including Paul’s home state of Texas, that don’t levy income taxes. Those states have far outperformed high-income-tax states on every measure of economic success. Now Oklahoma is poised to fully repeal its income tax and join the ranks of non-income-tax states. While Oklahoma is already a relatively business-friendly, low-tax state, income-tax repeal would launch it into the top tier of the most economically competitive states and the best places to live and work.
The Oklahoma income-tax repeal plan was developed by supply-side guru Art Laffer’s econometric firm, in partnership with the Oklahoma Council of Public Affairs, the state’s free-market think tank. Their study found that phasing out the state income tax would more than double personal-income growth, boost the size of Oklahoma’s economy by more than 20 percent, and create an additional 312,000 jobs over the next decade.
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The record is clear. Over the past decade, non-income-tax states have seen 59 percent economic growth, versus just 38 percent for high-income-tax states. Job growth has been 4.7 percent in the non-income-tax states, while high-income-tax states actually lost 2.9 percent of their jobs. Population growth is the same story, up 12.3 percent in the non-income-tax states and just 3.8 percent in the high-income-tax states. Perhaps most interestingly, non-income-tax states are seeing more rapid growth in state and local tax revenue, as the high-income-tax states are undermining economic performance and, as a consequence, depressing revenues.
Oklahoma has been strong economically over the past decade, but has lagged behind Texas in every measure. And while Oklahoma is business-friendly, Texas — with no income tax — is an attractive option for Oklahoma companies looking to relocate.
The Laffer-OCPA plan starts by replacing the existing Oklahoma income tax, a progressive tax with a top rate of 5.25 percent, with a flat tax that eliminates all deductions, credits, and loopholes. According to the Oklahoma Tax Commission, such a flat tax would have to be set at 3 percent to replace current income-tax revenue levels, but the Laffer-OCPA plan cuts it to 2.25 percent in 2013, and then cuts it by an additional 0.25 percentage points each year, until the income tax is fully repealed in 2022.
These tax cuts would trigger an economic boom that would offset about half the lost revenue from the plan. It would also significantly increase local-government revenues and decrease spending pressures by reducing the number of people enrolled in state-run welfare programs, including Medicaid. While additional spending restraint would be needed to balance the budget during the phase-out period, overall state spending could continue to grow.
The plan already has broad legislative support. It was introduced with 23 cosponsors in the State House as HB 3038. “In the past decade, states without a personal income tax outpaced Oklahoma in economic growth and job creation,” said state representative David Brumbaugh, a principal author of the bill.
Companion legislation in the State Senate, SB 1587, has four initial sponsors. State senator David Holt explained: “We are committed to making sure Oklahoma’s government delivers on its core missions, but we also cannot ignore the economic growth happening in states without income tax.”
State representative Leslie Osborn, another principal author of the bill, added: “Our goal is to transform Oklahoma into the best place to do business, the best place to live, find a quality job, raise a family, and retire in all of the United States. Not just better than average, but the very best.”
Isn’t that what all our elected officials should be focused on? Wouldn’t it be great if all of our state governments competed with each other with pro-growth tax, spending, and regulatory policies to attract as much investment and create as much economic growth as possible? Oklahoma legislators are leading the way by putting this aggressive pro-growth proposal on the table. We hope they succeed.
— Phil Kerpen is vice president for policy at Americans for Prosperity and the author of Democracy Denied (BenBella Books, 2011). Stuart Jolly is state director for Americans for Prosperity — Oklahoma.
I wouldn't say National Review has ignored Ron Paul. I don't think they've taken him with sufficient seriousness (with the exception of Tanner and - in a certain sense only - Krauthammer in one article), with too many tosses of the "zany" appellation. Charitably, when some writers say he is funny, I think that's a way to acknowledge him without wading into the thicket, but "zany" or "crazy" are denigrating. (They also have a Conservative Echo Chamber dynamic that mimics the MSM's use of "gravitas" to describe Dick Cheney.)
Too often, writers act as if he's a minor candidate. Here are some facts that make this unfortunate:
1) only two candidates are on the ballot in every state - and he's one of them;
2) when the field was crowded with more me-toos, he had a unique configuration
of support, giving him a raison d'être;
3) he has funding support and a ground-game that will take him to the convention.
I would submit that #2 & #3 might be true of a mythical "Newtorum". Currently, though, those facts don't apply to Newt or Santorum separately. Far from this being a biased comment, this is why Newt keeps pressuring Santorum to exit the race - they share too much of the same policy space. Both of them are playing for the Reagan Coalition, but are too tinged by their participation in the "W"-era betrayal of that coalition.
Ron Paul, lest we forget, gave the keynote address at the John Birch Societies 50th anniversary wing ding for wing nuts. That alone may explain why some people have a hard time taking him seriously, myself included. Add to that the trilateral commission , the racist newsletters published in his name, refusal to disassociate himself from loonies like the birthers, and the question becomes "How does anyone take him seriously?'. Cordially, Bill
Long term success of any strategy that leads to economic growth is endangered by the in-migration of Democrat voting blue-staters who fail to make the connection between their former home state's failures and their new red state's success. Look what has happened to NC.
I hope this passes since I reside in Oklahoma. Besides, the plan does make sense and would show the rest of the country how it's done. Also, maybe our congresscritters might see the economic sense of it all and would not be able to argue against it since facts are a pernicous thing!
The risk in this plan is drawing in Democrat voting blue staters fleeing their own decimated economies who haven't learned that it was the politicians and policies they supported that wrecked their previous home states and that they continue voting Democrat.
Migrating Democrats should have to go through reeducation camps.
I live in Illinois, and was hoping they wopuld at least quit raising my income taxes. I have been considering different low/no income tax states to move to, I guess I'll have to add Oklahoma to my list.
"It would...reduc(e) the number of people enrolled in state-run welfare programs, including Medicaid."
I have to ask why so many actions by conservatives, many if not most of whom claim to follow Jesus (who preached care for the poor), negatively affect the poorest citizens? It's rather difficult to afford a $500 a month health insurance bill when you make $7.25 an hour at a job you're lucky to have. If the idea is to purge people who don't qualify for assistance, why has a system that allowed them been tolerated?
"It's rather difficult to afford a $500 a month health insurance bill when you make $7.25 an hour at a job you're lucky to have. If the idea is to purge people who don't qualify for assistance, why has a system that allowed them been tolerated?"
This boils down to the old liberal vs conservative idea on self-preservation. You as a liberal, view this person as a victim. You do not hold them accountable for their own decisions but merely assume some amorphous "other" caused them to only qualify for a minimum wage job. Whether you blame society or heartless republicans does not really matter.
As a conservative I look at the situation you describe differently. How did this person do in school? Did they attend college? Did they drop out of either institution? Are they drug users? These are a few of the questions we ask when hearing about hypothetical worst case scenarios liberals like you throw at us.
Do YOU care about the poor? I know the liberals in my family view the Dems as the party that cares about the "little person". Do they really? The huge entitlement programs like medicare and SS have unfunded liabilities that some measure in the tens of trillions? Do you not understand how this has pushed our country to the brink of economic mediocrity? What have these plans (and others like welfare) helped people? One can look at cities in the US like New Orleans and Detroit (run by liberals for decades) and you will find millions of Americans who are mostly poor and not white living 100% off the government. generations of them!!!
You claim to care about the poor but you support a political party and philosophy that has done nothing more than create an almost permanent socio-economic under class in America.
Please keep this in mind the next time you seek to insult us conservatives and lecture us on helping people.
When a child gets a cancer diagnosis, do you tell them "Sorry, your parents didn't apply themselves enough, so you won't be able to get the treatment that will save your life?" I've had conservative friends answer "yes" to this question. It wasn't their problem.
There was a time in my life when I didn't have insurance and worked two very low paying jobs, which I was lucky to have. I had to depend on the system in order to afford some necessary medical treatment. I'm definitely not a liberal or a Democrat as you imply, but ensuring everyone has access to basic medical care without forcing them into bankruptcy is something our country should do. Finding a way to lower health care costs is essential to making that a reality, but until then welfare is the only avenue some people have.
RP, everyone in this country has access to health care. This is not about access, it's about who pays for your access. I pay over $1,000/month for health insurance for my family of 3. One of the reasons it is so high is programs like Medicare who pays bills at approx. 93% of cost (cost to the Dr, not of the bill). and Medicaid who pays roughly 90%. They also slow-pay in more than 90-days which adds to the cost. Add to that the effect of those low reimbursement rates that HMO's want to piggy back on them and you have a system, created by government, where nobody knows what anything costs. Try to run a business where you can calculate your costs but have no idea when you will be payed and how much you will be paid. It's amazing we have a healthcare system at all.
People in this country used to pay for the Dr themself when the Dr came. FDR made insurance a priority as a benefit at work when he froze wages. The way to attract people was through benefits. How many people ask the DR how much a procedure costs before they do it? This disconnect between the cost of an item and how it is paid for goes throughout the "safety net". We give them EBT cards for their food (and they have more in their basket than I do). We give them ATM cards for "walking around money" and the Dems complain when an attempt to limit their use at casinos and liquor stores is proposed. We give them housing to live in and the place looks like a pig sty (let's face it, they don't pay for it so the value is zero). We allow them to go to the ER for minor ailments (because they know it's free) and end up paying for the most expensive treatment possible when they should have just gone to the pharmacy and spent 10-20 bucks.
I know all this sounds heartless. I am a Christian. I don't know where in the Bible Jesus called for the government to do any of these things. Jesus said to "render unto Ceasar" which I believe is a two way street. If there is any requirement for solidarity with the poor in a community(and I believe there is), if we have a PERSONAL responsibility to help the poor than the poor have a responsibility to raise themselves up. I believe in one of St Paul's letters to the Thessalonians he basically says, if the poor won't work than they shouldn't eat. Assistance is supposed to be temporary, not a permanent entitlement.
Charity can only be virtuous if it is voluntary. Feeling good about yourself because you vote to take money from Paul to give to Peter seems not Christian charity, but rather false pride.
