From Tulsa World:
quote:
OKLAHOMA CITY -- The Oklahoma House has voted to eliminate the state sales tax on groceries.
But it's uncertain if the tax cut will actually go into effect.
The measure was sent to a joint House-Senate conference committee where differences will be hammered out. State budget writers have already agreed not to seek tax cuts this year because lawmakers have $114 million less to spend than they did a year ago.
House members rejected proposals to eliminate the grocery sales tax last month.
The tax cut plan was approved 85-5 Thursday after it was attached to a separate bill by Democratic Rep. Richard Morrissette of Oklahoma City.
Morrissette says the tax cut will reduce state revenue by $133 million in the fiscal year that begins July 1.
Morrissette says it's important to eliminate the tax because of soaring food prices. He says the proposal will put sales tax money back in the pockets of Oklahomans.
Wow, if that passes I will get my Harvard Meats for about 20% off with the discount. [:D][:D][:D]
But now the real question is where will the state 'nickel and dime' us to make up for it?
I lived in Texas for three years; I loved the fact there was no sales tax on grocery items. But you just have to know that it will be made up somewhere. And does that mean that the counties and municipalities will be required to remove their taxes on groceries as well?
I don't think they can do that unless it is a constitutional amendment. Currently towns can levy the tax under state law.
I am not sure though.
They're talking about eliminating the STATE sales tax of 4.5%, the county and city sales tax would still apply, I believe.
I'm actually against this. A sale is a sale. Grant, it punishes people who spend more on groceries, which includes large families. But those families also have to buy more clothes, more toys, more bikes, and more everything. So should those be exempt too?
- - -
What counts as a grocery item? Is a 12 pack of coke a grocery item? Then what about a 64OZ fountain drink at QT, it's cheaper by volume and with refillable mugs is better for the environment.
If coke shouldn't count as a grocery item, what about bottled water? If the family wanted to save money they could just turn on the tap. Again, what about bottle water at QT?
Candy = grocery item? Red Bull?
- - -
If I buy field corn to make flour, tax exempt. If I buy it to feed squirrels it gets taxed.
Pumpkins for pie would be tax exempt, pumpkins for Halloween display should be taxed.
Orange Juice will be tax exempt as a grocery item. What about alcohol free margarita mix sold as Reasor's in those big buckets? Neither is an alcohol product but both can be used as such.
- - -
Beer is better for you than soda pop or half the snack foods in existence. For centuries it was a staple food. So hydrogenated oil fried snack cakes with tons of preservatives, sugar, food coloring, and other junk is tax free... but beer is taxed extra?
- - -
Isn't this an unfair tax break for the obese? Oklahoma has a weight problem as it is, this will only "encourage" more consumption of food. Think of the children.
You chuckled at that argument, but the same one is used for alcohol taxes with a straight face.
- - -
What about school supplies? We have tax free holidays but my kid needs crayons, glue, pencils, markers, paper, lunch boxes and other things on a regular basis. Why are you taxing my education? Think of the children.
- - -
Books. Why sales tax on books? Shouldn't we encourage reading. Think of the children.
- - -
Prescription medication. What about over the counter medication then, lest I be punished for a drug going over the counter.
- - -
and on and on. Once you start exempting things the list grows and becomes more complex. Even the simple "grocery" leaves areas open to debate (does the clerk have to ask the use, will the legislature pick what is healthy and should be encouraged)? With the new loophole, every lobbyist in the state will try to get their product defined as a grocery (we define the NBA as a "basic industry" last week).
Taxes suck. I agree. But as indicated by Inteller the state will get their money. Keep it simple and don't start pretending like you are giving a tax break on food when you're just going to take it back somewhere else. The government playing favorites never ends well.
Plus, the bottom 20% of Oklahoma already is exempt from taxes on groceries, because we the tax payers are already paying for their food.
I agree CF, sort of...but if you want taxes to go down state wide (like I do) then this could be a start.
I dislike exemptions too, but mostly I dislike exemptions for categories of people. Food is something I believe everything purchases. So I look at it as having a closer relationship with an income tax cut than an exemption for say all Oklahoman's who purchase Hornets tickets(state law now). In my above example, a small group subsidizes the tax burden of the entire state.
Don't get me wrong, if the measure passes it will still be an exemption and ONLY those who buy groceries will benefit. I am on the fence only because it has such a broad impact.
With your other examples, not sure if I agree with you or not because I don't know if you were being completely serious or just facetious. I don't think taxes should EVER be a moral tool of any government. Either you need them to get things done or you don't. Roads don't breakdown faster in a town full of beer drinkers or sewer pipe doesn't crack at a faster rate in a community of obese people. Wait, that may not be true. [:D]
Would make a lot of sense if this eliminated both State AND local taxes, since all taxes are collected to the Oklahoma Tax Commission, and it just cuts the appropriate checks back to the local governments. Would save some operating costs just in the collection of taxes altogether from grocery stores, I would think.
quote:
Originally posted by YoungTulsan
Would make a lot of sense if this eliminated both State AND local taxes, since all taxes are collected to the Oklahoma Tax Commission, and it just cuts the appropriate checks back to the local governments. Would save some operating costs just in the collection of taxes altogether from grocery stores, I would think.
Great idea!
quote:
Originally posted by mrhaskellok
quote:
Originally posted by YoungTulsan
Would make a lot of sense if this eliminated both State AND local taxes, since all taxes are collected to the Oklahoma Tax Commission, and it just cuts the appropriate checks back to the local governments. Would save some operating costs just in the collection of taxes altogether from grocery stores, I would think.
Great idea!
Then I read CF's post and figure that they probably can't just classify an entire store as tax exempt. Oh well.
By and large I was serious. The fat reference was a bit of a joke, but raises a fair point (worse tax arguments exist). In Iowa groceries are tax exempt, but you are supposed to confess if your use is for something other than as a food item: so a few Halloweens ago they cut off pumpkin patches from the exemption - which led to a whole thing.
Same with the exemptions for Redbull and Twinkies but not beer, when you'd be healthier if you had a couple beers a day than a couple redbulls.
All and all the post raises fair points I think, some may seem outrageous but we are dealing with a bureaucracy here, nothing should seem too odd.
I assumed you were serious, which is why I went into my tirade about streets and sewer. By and large, exemptions rarely make economic sense.
OML has some good information on exemptions. I will try to locate it and list all of our exemptions on a new thread so we can discuss the issue at large.
This same issue passes the House every year then dies before it ever gets to the Governor.
Same thing will happen again.
I always thought that the Oklahoma constitution prohibited a county or municipality from levying a sales tax unless the tax was also levied by the state, or specifically authorized by state law. So if the state abolishes taxes on groceries, the law may have to change to continue to authorize local grocery tax levies, or they would be cancelled too.
The problem with sales tax on groceries is that it hurts the poorest people the most. They guy making $100,000 a year doesn't think much about the extra 8.5% he pays at the grocery store in Tulsa, but low-income people sure do. While high-income folks MAY pay more actual tax dollars (many do not), regressive sales taxes cause low-income folks to actually pay a higher percentage of their income in taxes.
I watched an interesting story on PBS recently about a grassroots effort in Alabama to overhaul their highly regressive tax system, including the repeal of sales taxes on groceries. The story said that Alabama was one of only 2 U.S. states that fully levies sales taxes on all grocery items. The other was not mentioned, but it has to be Oklahoma.