Lawmakers at the state and federal levels are looking for ways to spur economic growth, and an Oklahoma legislator has a plan to boost his state’s economy.
Senator Jay Paul Gumm
says a tax cut geared toward working and middle class Oklahomans is “a sure-fire way” to strengthen Oklahoma’s economy. That is why the Democratic senator from Durant has continued his fight to remove the sales tax on groceries.
“Removing the grocery tax would provide a state economic stimulus and help every Oklahoma family,” said Gumm. “Removal of the state sales tax on groceries would put real money back into the pockets of working and middle-class families, helping keep Oklahoma’s economy strong.”
Gumm’s Senate Bill 42 would remove the sales tax on eligible food and beverages, excluding alcoholic beverages and tobacco. Oklahoma’s state sales tax on groceries is 4.5 cents on every dollar spent; some cities and counties have levies that drive the total tax to more than 9 cents on the dollar in some areas.
“The money Oklahomans save at the check-out stand would be spent on other necessities, further spurring retail spending,” he said. “If the best way to strengthen the economy is to get direct and rapid dollars into consumers’ hands, then ending the state grocery tax is the best way for state government to do that for the long term, beyond this current downturn.”
Gumm has championed removing the grocery tax for years, but the effort has met fierce opposition from the many state lobby groups that represent small cities and towns. Under provisions of this year’s bill, the state would reimburse municipalities and counties for any revenue lost as a result of the sales tax exemption. (How expensive that would be for the larger metropolitian areas not detailed.)
“Everybody buys groceries, and working and middle-class families spend a greater proportion of their income on necessities like food, and a larger proportion of their income on this tax than do the wealthiest among us,” he said. “Ending this unfair tax would strengthen families and spur retail spending, which is the best way to spur a state or national economy.”
The lawmaker noted several proposals for cutting taxes are already being discussed. Former Gov. Frank Keating recently called on the new Republican majorities in the Legislature to repeal the income tax. Instead, Gumm said lawmakers of both political parties should focus efforts to help Oklahomans most in need of help: working and middle class families.
“If we’re going to talk about reducing any taxes this year, the grocery tax should be the one tossed into history’s trash can,” he asserted. “The grocery tax is a hurtful, regressive tax that hits average families hardest because it devours a greater percentage of their income than it does for the very wealthy. Ending the state grocery tax – like the back-to-school sales tax holiday – would put money back into the pockets of those who need it most while providing businesses with a much-needed boost.”
SB 42 will be considered by lawmakers when the Oklahoma Legislature convenes Feb. 2, 2009. It has been considered often and with no success. While such a proposal sounds good, the many small towns in Oklahoma have no other business beyond a grocery store and rural legislators and their supporters will not allow the removal of their only source of local revenue.
This was one issue now U.S. Representative John Sullivan (R-Dist.1) pushed hard with no success during his years of service in state government.