I am reminded of the story of Peter Pan when I write this week’s post. In the tale, the only children that could fly were those that truly believed they could. There is an interesting debate going on at the state capitol over cutting the state income tax that some believe will help our economy soar, while others predict it will spiral us downward into a third rate economically uncompetitive state.
I wish the debate was just a political one but I fear the outcome could affect Oklahoma’s economic success for generations. At stake is not just how we pay for state services like schools and roads, but whether we as taxpayers want to pay for them at all. Oklahoma is essentially run on our income tax, where other states like Texas fund their state government with a taxing formula more heavily dependent on property taxes.
You can’t throw a rock down a hallway on North Lincoln without hitting a politician that made campaign promises to lower taxes. It is a common refrain while running for office, but a difficult policy to carry out because of all those taxes fund services that many people enjoy. So those in favor of cutting taxes are fond of saying that, in fact, we will not have to cut services at all because of the increased economic activity which lower taxes will promote. The problem is, every economist I have talked to says there is no historical proof this works. In fact, it first grew in popularity in the Reagan years when supply side economics was the fad, and our national debt bloomed into the billions.
But with the hopes that I can have my ice cream and eat it too, I visited with economic development specialists and business leaders, to see if lower taxes are the driving force behind economic growth. In this week’s video segment, I talk to the experts to see what they think. I am curious to hear your opinion too and remember…all you need is trust and a little bit of pixie dust!