Opinion: Every day, Oklahomans make careful decisions about how to save. A financial adviser in Edmond sits across from a wheat farmer outside Enid and maps out a retirement plan. A CPA in Marlow helps a small business owner like me look for a smart way to set aside extra income after covering payroll, expenses, and taxes.
More often than not, mutual funds are part the answer: they’re accessible, diversified, and don’t require the time or capital to pick individual stocks. What most of these savers don’t know is that the tax code is quietly working against them.
With a median household income nearly 19% below the national average, every dollar Oklahomans save has to work harder. Yet today, two families who invest the same amount in the same market can face very different tax bills at year’s end, simply because of how they invested.
Put money in an exchange-traded fund, known as an ETF, or individual stocks, and you pay taxes only when you sell. Put money in a mutual fund, and you can receive a tax bill for gains you never chose to realize and never saw in your account. Same market. Different rules.
There’s no good policy reason for this disparity. It’s a quirk of the tax code, one that falls hardest on the investors least equipped to absorb it. Oklahoma has over 358,000 small businesses and 86,000 farms and ranches, the fourth most in the nation. Many of these owners and operators turn to mutual funds precisely because their income is irregular and traditional retirement accounts have limits. When the tax code penalizes that choice, it’s money that stops compounding, retirements that come up short, and farms and businesses with less to reinvest. New research shows that deferring this tax could net an investor up to $1,340 more over ten years on a $10,000 investment. For people already working on thin margins, that’s not a rounding error.
The good news is that a fix exists. The GROWTH Act would end the premature taxation of mutual fund investments by taxing investors only when they actually sell their shares, aligning mutual funds with how every other comparable investment is already treated. It already has over 100 bipartisan co-sponsors in the House. What it needs now is a Senate champion.
Senator Lankford sits on the Senate Finance Committee, which has direct jurisdiction over this legislation. He has said tax policy is one of the top priorities for Oklahomans, and his record backs that up: he’s fought for accurate federal retirement settlements, worked to lower prescription drug costs for seniors, and pushed back on IRS overreach. The mutual fund tax disparity is exactly the kind of problem he’s built his career around: a structural inequity in the tax code that punishes the wrong people for no good reason.
The families saving carefully, the farmers planning for the next generation, the small business owners stretching every dollar need a guarantee that they won’t be punished for doing the right thing.
Senator Lankford has the seat, the record, and the moment to fix that. We are counting on him.
About: Jessica Garvin is a Small Business Owner/Former State Senator