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Oklahoma's tax system needs an overhaul

Published: November 26, 2012

Regarding “Obsessing on income gap no way to set policy” (Our Views, Nov. 19): Oklahoma's tax system needs an overhaul. It was created to raise revenue to pay for government services when Oklahoma had a commodity-based economy. The economy of Oklahoma, and the rest of the nation, has changed significantly since then, the clearest example being whether and how the state should tax online purchases. The editorial asserted that the Oklahoma Policy Institute wants to eliminate the sales taxes on groceries. It pointed out that the state's municipalities would never agree to it because they rely so heavily on sales taxes to finance local government. This leaves the possibility of exempting the purchase of groceries from the state's sales tax while leaving intact the municipalities' sales tax on them.

The problem has been that many of the municipalities base their sales taxes on the state sales tax. Legislation eliminating the state sales tax on groceries would indirectly eliminate the local tax as well. This has always been one of the main issues that's prevented passage of a bill to eliminate the state's sales tax. Here's a simple solution: Make the state sales tax on groceries something like one mill (1/1,000th of a dollar). This would effectively reduce the state sales tax on groceries to virtually nothing and allow local sales taxes to remain unaffected. A change like this would be the best solution — at least until the state transforms its entire tax system to reflect our current economic situation.

Jim McGoodwin, Edmond


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