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Taxes already spent

Oklahoman Published: October 12, 2011

Regarding “Lost tax on online sales may cost state $225M each year” (news story, Oct. 5): Instead of considering the funds as lost income to the state, perhaps we should look at that money as a further “stimulus” to the economy that increased the purchasing power of Oklahoma residents and sales of the products nationally. Without the discounts in the form of taxes not collected online, perhaps the sale would never have occurred in the first place. Also, since almost no one saves any significant portion of their discretionary income, one could reasonably estimate that most of the $225 million not collected was spent in other ways. Therefore, most of that money likely went back into the economy through non-online purchases, further stimulating the economy, and resulting in additional tax revenue to the state. So the estimated tax loss would be reduced by the tax collected on subsequent sales.

The multiplier effect of money spent in an economy would further extend the illustration's result. Perhaps the jobs saved as a result of the unintended stimulus contributed to Oklahoma's good record on employment success. And perhaps that stimulus and the jobs supported will disappear if the government is successful at collecting the tax lost on online sales!

Larry Hillman, Edmond


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