A line in “True Grit” (1969 version) has a Fort Smith boardinghouse lodger joking about the entree on offer for the evening meal.
“Watch out for the chicken and dumplings,” he says. “They'll hurt your eyes.”
“They'll hurt your eyes looking for the chicken.”
Some Oklahomans looking for the benefit of an income tax cut proposal might need more than glasses. Perhaps a microscope.
It took some grit for Gov. Mary Fallin to get her ambitious tax reform proposal to this stage. She got nowhere near all she wanted — including a gradual phaseout of the personal income tax — but she'll get more than a sop of gravy if the plan clears the Legislature.
Finding the benefit is another matter.
The top rate will drop from 5.25 percent to 4.8 percent. That's delicious. Tax rate categories will drop from seven to three. That's toothsome as well. An economic growth trigger would induce another drop, to 4.5 percent. That could potentially leave a bad taste.
Where the thing gets tricky is in the offsets. Most taxpayers will pay the top rate (they already do) and so will be taxed at the new lower rate. But many will also lose the personal exemption and other benefits. As an agreement between Fallin and Republican legislative leaders was announced Thursday evening, one key lawmaker said he doesn't actually know how many people will get a tax cut and how many will get an increase.
That's something taxpayers need to know and they need to know it now. If loss of the personal exemption ($2,000 per couple) costs more than the tax cut saves, this isn't really a tax cut. Indeed, preliminary figures show that some taxpayers will pay more.
Looking for the political benefit of a tax cut is easier than finding the economic benefit. Fallin and GOP leaders can say that they've lowered the income tax rate to its lowest point in modern history and below the 4.9 percent approved recently in Kansas. In all, 33 business tax credits would be eliminated, but these won't result in much additional revenue.
In contrast, the personal exemption for higher-income taxpayers is worth serious money. A married couple with a joint income of $70,000 a year could no longer claim the exemption. They would, however, be taxed at a lower rate.
On paper, the plan sounds like a good deal for lower-income Oklahomans. This group has been overtaxed under the current system because the top rate kicks in at a low income level. Under the plan, the top rate would start at an even lower income threshold than before — albeit at a lower price point.
We could say this agreement should have been announced earlier in the legislative session so a thorough vetting could take place. But that's often not how weighty public policy matters are settled. As always, critical issues are going down to the wire as the session nears its finish.
If you're looking for an end to that practice, you'll need a telescope.