Eliminate income taxes over 10 years?

[heironymouspasparagus]

Polk fun all ya want, but If Fallin can get Oklahoma free of state income taxes, Oklahoma will be taking jobs away from Texas and will become a job magnet. Oklahoma is also blessed with natural resources and is bloated with natural gas reserves just waiting to be developed.

Overall tax burden is noticeably less than Texas already.  How would your delusional world explain why we haven't already been taking jobs from Texas?  This ought to be good....


You do realize that other taxes will increase through the roof to make up the difference?  Texas has property taxes light years higher than Oklahoma just to help make up the difference.  And the difference is greater than a 1:1 trade for income tax based on friends experience who have moved there.

I used to think Fallin was the dumbest thing in the state...at least I know she doesn't believe the crap she spews - she just spews it for her audience.

[heironymouspasparagus]

The more I think about it, the more I think that shifting away from sales and income tax in favor of property tax might just be the way to go. The (relative) stability in collections would be nice, if nothing else. Not real friendly to all the folks we've encouraged to buy their own home instead of renting, though. (pricing pressure from competition would arguably keep rents from rising enough to fully cover the cost of increased property tax)

If nothing else, it ought to make Gassy happy. His idols were pretty much property tax freaks.

I can hear you giggling to yourself from here over this one....

[carltonplace]

The more I think about it, the more I think that shifting away from sales and income tax in favor of property tax might just be the way to go. The (relative) stability in collections would be nice, if nothing else. Not real friendly to all the folks we've encouraged to buy their own home instead of renting, though. (pricing pressure from competition would arguably keep rents from rising enough to fully cover the cost of increased property tax)

If nothing else, it ought to make Gassy happy. His idols were pretty much property tax freaks.

Renters pay property taxes too...its imbedded in their rent.

[nathanm]

Renters pay property taxes too...its imbedded in their rent.

Let me quote myself:

(pricing pressure from competition would arguably keep rents from rising enough to fully cover the cost of increased property tax)

Obviously, that would be less likely to hold true where rents are already only at/near break even. The other thing that would work to hold rents down is the increased cost of holding vacant property. It would encourage density and active use rather than encouraging people to buy and hold. I wouldn't terribly appreciate paying $11,000 a year in property tax, but it might be worth it if we could eliminate state income and sales tax as a result. The effect on renters, especially among the poor, would have to be carefully considered, though.

It's just something I've been thinking on.

[LandArchPoke]

Let me quote myself:

Obviously, that would be less likely to hold true where rents are already only at/near break even. The other thing that would work to hold rents down is the increased cost of holding vacant property. It would encourage density and active use rather than encouraging people to buy and hold. I wouldn't terribly appreciate paying $11,000 a year in property tax, but it might be worth it if we could eliminate state income and sales tax as a result. The effect on renters, especially among the poor, would have to be carefully considered, though.

It's just something I've been thinking on.

In reality you would think people would have this mindset of, if the taxes go up on my land then lets put something on it that will generate income... Well not in Oklahoma. I would predict we'll see more of the "surface parking lot craze" sweep through the state. Just think of what happened in downtown with the Coney Island Building, the taxes went up, so instead of putting something on the land/ renovating the property to produce income they just knocked down the building to make the lot less valuable, and easier to manage the taxes on it. I could see this becoming a huge problem in the inner cities where land lords that own units for lower income people, or people holding onto properties waiting for land prices to go up will just knock down the structure and leave empty lots or pave over them for parking where it makes sense.

For example I've looked into buying land in the Tracy Park/Pearl area in hopes to try and develop it in the near future and land prices with no structure on it seem to be anywhere from $8,000 - 15,000 while one with a home on it, even in bad shape, have value around $50,000 or more. The property tax increase percentage wise won't dramatically increase if there is nothing of value on the land. People around here will just start bulldozing vacant or run down properties.

[nathanm]

In reality you would think people would have this mindset of, if the taxes go up on my land then lets put something on it that will generate income... Well not in Oklahoma. I would predict we'll see more of the "surface parking lot craze" sweep through the state. Just think of what happened in downtown with the Coney Island Building, the taxes went up, so instead of putting something on the land/ renovating the property to produce income they just knocked down the building to make the lot less valuable, and easier to manage the taxes on it. I could see this becoming a huge problem in the inner cities where land lords that own units for lower income people, or people holding onto properties waiting for land prices to go up will just knock down the structure and leave empty lots or pave over them for parking where it makes sense.

For example I've looked into buying land in the Tracy Park/Pearl area in hopes to try and develop it in the near future and land prices with no structure on it seem to be anywhere from $8,000 - 15,000 while one with a home on it, even in bad shape, have value around $50,000 or more. The property tax increase percentage wise won't dramatically increase if there is nothing of value on the land. People around here will just start bulldozing vacant or run down properties.

Certainly in the CBD property tax could be made high enough to make surface parking (or allowing land to remain vacant) a very unattractive proposition. I do agree that it would be something that would have to be carefully considered due to its impact on existing less dense neighborhoods. A very generous homestead exemption might help with that.

Some disclosure might help illustrate why I'm thinking about it: Australia's property boom has led to a situation where land prices are (less so now than even a year ago) rising so rapidly largely due to home builders buying up most of the available land and then building homes at a rate far below what demand would indicate, thus driving prices up further. This is apparently enabled largely by low property tax. It got me to thinking that property tax might be a useful tool for helping to generate density, while also allowing for lower sales and income taxes the righties would like very much.

[AquaMan]

OUr generation was schooled in business college to "not operate a business to reduce or eliminate taxes" as a primary goal. Instead focus on revenue/profit growth and then work to keep taxes and other expenses in check. I'm not sure that has survived to the following generations who view all taxes as too high, and spend inordinate efforts to avoid them. Dropping Coney Island is the result.

Are you proposing that the property tax burden be shifted to uninproved property in an effort to stimulate growth and fight that mindset of reducing taxes through bloodletting? If so what are the implications? It seems that some people are going to take a bath on currently owned properties unless you free up capital financing at the same time. Those people are going to vigorously oppose shifting property tax burdens. Those people are important and can influence those policies.

[nathanm]

Are you proposing that the property tax burden be shifted to uninproved property in an effort to stimulate growth and fight that mindset of reducing taxes through bloodletting? If so what are the implications? It seems that some people are going to take a bath on currently owned properties unless you free up capital financing at the same time. Those people are going to vigorously oppose shifting property tax burdens. Those people are important and can influence those policies.

All property, not just unimproved property. (edited to add: I may be wrong about that) The idea is that it captures what is essentially land rent and forces property owners to make money on their improvements or sell it to someone who will. If you take that revenue and lower income and sales tax (and/or do the homestead exemption thing) it should keep the tax burden on individual homeowners reasonable. Again, I haven't researched in depth enough to say that it's a good idea, but it seemed like it was worth discussing. It might be more applicable to a market with ever-increasing rents like NYC, though. It theoretically helps that by forcing people to keep their property rentable or build new rental units lest they end up paying large property tax bills for idle or suboptimally used property.

I was hoping to get some input from Gaspar since he ought to be pretty familiar with the concept of land rent given that he often quotes folks who had a lot to say on the subject.

Also, I think we'd all appreciate it if we had less tax paperwork to deal with. Moving the tax burden away from economically productive activities and onto unearned income like land rent might get us much of the way there. The figure I've seen proposed is 6%. I'm not sure what that would add up to statewide or nationwide.

[AquaMan]

Remember that some people, as Guido often points out, don't make enough money to pay state or federal income tax. When you raise their property tax they don't realize any savings from elimination of sales tax or income tax. That includes those on fixed incomes like the elderly, divorcees, widowers etc. Pretty soon their properties become more valuable as rentals.

[Jammie]

If you come visit - and you should!! - bring a fishing pole!  We got lakes.  Sadly, not the clear water kind up there, but muddy and brackish, but loaded with black bass, stripers and catfish!  And crappie and gar and paddle fish and many others.  (Sorry, no pike...)  But you definitely want to spend your time in northeast Oklahoma.  There are some interesting things in OKC, but it you don't have unlimited time, stick within about 80 miles of Tulsa.

Oklahoma has a good bit of technology and engineering.  You have some technology up there - SymCom is in Rapid City.  And you got Sturgis!  Well, maybe that one isn't quite so technical, but it is interesting....


Yes! We did make a trip down that way, but it's been a few years ago already. We spent a couple days in Tulsa and then drove to the southeastern part of the state coming back north along the OK/Ark border. Grand Lake is an awesome place! My husband was ready to pack up and move to Grove, but I reminded him that we still needed employment and there didn't seem to be much there. It's definitely a nice vacation spot though.

My choice is Tulsa, even though the traffic and population is much more then we're used to. We liked Gilcrease Museum and the Rose gardens. The zoo was okay. The aquarium was pretty nice, too. We left before we could see Philbrook, but I figured that gives us another reason to come back! Grove may have a good hospital, but I'd rather live in an area that has specialists, too. One seems to think that way when you hit middle age.

We have plans on moving to a warmer climate one of these days and we've checked out a lot of areas of the country and somehow keep coming back to eastern OK. It's the only place that we both liked. He likes the desert. I don't. I like sub-tropical. He doesn't. You get the picture. 

[Townsend]

"We cut taxes...sorta."

GOP plan to cut taxes for 54% of Oklahomans

http://www.ktul.com/story/18558371/gop-plan-to-cut-taxes-for-54-of-oklahomans?utm_source=twitterfeed&utm_medium=twitter

OKLAHOMA CITY (AP) - An analysis of a GOP plan to slash Oklahoma's income tax shows about 54% of Oklahomans would receive a tax cut next year for an average savings of $60.

The analysis by the Oklahoma Tax Commission released on Friday shows another 21% of Oklahomans would see no change in their tax liability. Nearly 25% of Oklahomans would have an increase in their tax liability under the plan.

Gov. Mary Fallin and legislative leaders announced an agreement on the plan Thursday to slash Oklahoma's top income tax rate from 5.25% to 4.8% next year. The proposal passed its first hurdle on Friday when it was signed out of a House conference committee.

The proposal is expected to be considered Monday by a Senate panel.

[sauerkraut]

The state of Oklahoma's unemployment rate has droped once more to 5.0% the lowest since 2008, tax cutting works... Mary Fallin's new  income tax plan will give residents more spending money and grow our economy. If Mary Fallin can get rid of Oklahoma's state income tax we'd be attracting jobs in from other states and even draw in jobs from Texas. One problem Oklahoma has that may need to be addressed is the tort reform thing- Texas has better tort laws. IMO Oklahoma is on the right path for growth and a booming economy.

[AquaMan]

The state of Oklahoma's unemployment rate has droped once more to 5.0% the lowest since 2008, tax cutting works... Mary Fallin's new  income tax plan will give residents more spending money and grow our economy. If Mary Fallin can get rid of Oklahoma's state income tax we'd be attracting jobs in from other states and even draw in jobs from Texas. One problem Oklahoma has that may need to be addressed is the tort reform thing- Texas has better tort laws. IMO Oklahoma is on the right path for growth and a booming economy.

So, how many jobs are you going to create with your $60? Oh, wait, I think yours doesn't come till later. They are starting with the wealthy first.

[Hoss]

The state of Oklahoma's unemployment rate has droped once more to 5.0% the lowest since 2008, tax cutting works... Mary Fallin's new  income tax plan will give residents more spending money and grow our economy. If Mary Fallin can get rid of Oklahoma's state income tax we'd be attracting jobs in from other states and even draw in jobs from Texas. One problem Oklahoma has that may need to be addressed is the tort reform thing- Texas has better tort laws. IMO Oklahoma is on the right path for growth and a booming economy.

Have you got the internet equivalent of a tape recorder going for this?

[heironymouspasparagus]

The state of Oklahoma's unemployment rate has droped once more to 5.0% the lowest since 2008, tax cutting works... Mary Fallin's new  income tax plan will give residents more spending money and grow our economy. If Mary Fallin can get rid of Oklahoma's state income tax we'd be attracting jobs in from other states and even draw in jobs from Texas. One problem Oklahoma has that may need to be addressed is the tort reform thing- Texas has better tort laws. IMO Oklahoma is on the right path for growth and a booming economy.

I'll try to keep this simple so you can understand the question and maybe come up with an answer.....part two will be later....


What is YOUR recommendation to replace the money (1/3 of the state budget) that will be gone when income tax is gone?  In other words, how are we gonna pay for all the stuff?