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Home » Articles » News » Opinion » No income tax cut, please
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May 30th, 2012 - Mickey Hepner

No income tax cut, please


Mickey A. Hepner Dean, College of Business Administration University of Central Oklahoma


 

It was an eyeopening experience for me. Traveling internationally, seeing new places, meeting people and learning about new cultures is always transformational in some way.

But this trip was even more so because it changed not only my perception of the world, but also my perception of how the world sees us.

A year ago, I had the pleasure of visiting the country of Montenegro, a beautiful Balkan nation recovering from years of regional conflict. As I showed my passport to the officer at the Podgorica airport’s passport control office, he asked me a question that highlighted just how much the world’s perception of my hometown has changed.

From the question he asked, I could tell that he knew about Oklahoma City. But the city he knew was not the Oklahoma City of the Old West. Nor was it the city of Will Rogers and Wiley Post.

No, he wanted to know about the Oklahoma City Thunder.

A few nights later, as I was eating dinner in a Podgorica restaurant, I noticed that on the restaurant’s wall, like in many U.S. restaurants, there was a television showing sporting events. It took me a few minutes before I realized that the logo on the floor of the basketball arena of the game I was watching was the logo for my hometown Thunder. On the television in front of me, more than 5,700 miles from home, I was watching a replay of the previous night’s playoff game between the Thunder and the Dallas Mavericks.

Interestingly, what most pleased me wasn’t the replay of a game I knew the out come to, but the images they showed of my hometown. At every commercial break, the broadcast showed images of Bricktown, the canal, the (now-named) Chesapeake Arena and the skyline.

I realized that the world was seeing a dynamic, vibrant city that has become a desirable place to live, work and visit. I realized that these images will have a lasting impact on our state economy.

For this, we have the MAPS program to thank. Without that program, pushed by the city’s business it, there never would have been an NBA-quality arena, nor an NBAquality city, to welcome a team. In short, without MAPS, the world wouldn’t be seeing a dynamic, vibrant Oklahoma City, and we would be poorer.

It is interesting to me, in the midst of the current debate over state taxes, that the most successful economic development effort ever undertaken in this state — the MAPS projects — did not succeed because we cut taxes, but because we raised them.

It was the promise of an improved city that convinced city voters in 1993 to impose a 1-cent sales tax increase to fund city improvements. It was that commitment to our future that led residents a few years later to renew that increase in order to fund the MAPS for Kids improvements to our schools.

And most recently, it was that forward focus that enticed voters to approve the MAPS 3 projects. With each of these initiatives, the objective was to use a tax increase to fund significant improvements to city services that enhance the quality of life for residents.

What many politicians fail to realize (apparently) is that quality of life is much more important to economic development than tax cuts. Yet, in the name of economic development, Oklahoma politicians routinely proffer tax-cut proposals. Most concerning are the slate of recent proposals to eliminate the state’s personal income tax.

The economic evidence shows that the Oklahoma economy is already outperforming the states that lack a personal income tax. For example, on a per-capita basis, since 2000, the Oklahoma economy has grown at the 15th-fastest pace in the nation — faster than six of the nine states that lack a personal income tax.

In that time, Oklahoma’s per capita personal income has risen at the seventh-fastest pace in the nation — faster than seven of the nine states lacking a personal income tax. Furthermore, since 2000, Oklahoma’s median household income has risen at the fourth-fastest pace in the nation — faster than all states lacking a personal income tax. Finally, with all three of these metrics, Oklahoma is performing far better than Texas.

The evidence clearly shows that eliminating the income tax does not guarantee faster economic growth. But since the income tax accounts for one-third of state general revenues, eliminating the tax does guarantee less government spending on education, health care, roads and prisons — the programs that enhance our quality of life.

With the Oklahoma City Thunder enjoying their best season ever, it’s easy to get swept up in the idea of topping Los Angeles, Dallas, New York and Houston on a regular basis. With Oklahoma’s economy outpacing the nation, it is easy to believe now that Oklahoma City is truly a big-league city. It is also easy to forget that the Thunder’s presence and Oklahoma City’s emergence, would never have occurred without increased government investments in our city’s future. Let’s hope our leaders do not forget this valuable lesson.

 
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