Budget & Tax

Patrick B. McGuigan | March 12, 2014

Are Tax Hikes and Spending Increases Inevitable?

Patrick B. McGuigan

A great historian with whom I was privileged to study uttered, during an evening class in my years at Oklahoma State University, words that stuck with me through the last four decades: “Nothing is inevitable. Nothing—not the rise and fall of great nations; not the dawning of another day.”

I have forgotten if that was original, or repeated thoughts from a great writer of the past. The latter part of the comment appealed to my spiritual side, my belief that there is an order to the universe, that a Benevolent and Just One governs that order, and that we are subject to that order regardless of wealth, intelligence, or any other attribute.

And, the first part of the comment appealed to my rational side. What we call “history” flows from the decisions of actors on the stage … of history. Some are deeply depraved. Others are, as a Baptist preacher friend of mine said years ago, “so heavenly minded that they are no earthly good.”

Most of us fall somewhere in between, including those who fight over government spending, the tax burden most appropriate in a free society, and such things.

My parents both grew up as Democrats. Daddy admired Franklin D. Roosevelt; Momma was a Truman acolyte. They both loved Dwight D. Eisenhower and John F. Kennedy.

Both, long before they left this vale of tears, became conservative Republicans, in belief and in practice. Save for Ronald Reagan, their evolution was not because of the Grand Old Party’s modern leaders, but because they paid attention.

As a lad growing up in a union Democrat family, I concluded that the government of my country was too large, too intrusive, and too abusive of the productive classes to be of true service to our country. That government did not and does not well serve rich or poor, able-bodied or disabled, the faithful or those without faith.

As years passed, I fused that belief into those wise words from the old historian about the way things happen. Nothing is inevitable, yet every year of my life, the governments of this nation and state I love have grown, confiscating more and more of the people’s resources, delivering less and less of real value in return.

I know not everyone shares this view, but it is a worldview neither dysfunctional nor irrational. It is a belief well represented in the founding generation of America and in every generation since. These days, it is a belief with which some not only disagree, but consider a form of psychosis.

Yet, as a conservative, I still believe: Public policies evolve and develop based on the actions and reactions of real human beings, not plaster saints or stone monuments or inevitable social forces.

Nothing is inevitable except death and judgment; but a whole lot of people believe that ever-rising taxes are not only inevitable but essential to the health of society, the productivity of government, and the course of history.

And still, I dissent, even as I love those who conclude otherwise.

In 2012, Oklahoma Gov. Mary Fallin wrote, in the foreword to a policy book for the American Legislative Exchange Council (ALEC): “Based on the success we have enjoyed enacting pro-growth policies like those championed by ALEC, our state is moving forward with a bold tax reform plan that will represent the most significant tax cut in state history and chart a course toward the gradual elimination of the state income tax.”

Nothing materialized.

My pal Andrew Spiropoulos, a professor at my dad’s alma mater (Oklahoma City University) and a distinguished fellow at OCPA, reflects that too many people “seem to have been uninformed that conservative legislators are expected to cut taxes and spending.”

Indeed, our political leaders have raised taxes and spent record amounts of money right here, in the place deemed the reddest of the red states.

Jonathan Small, OCPA’s vice president for policy, has pegged at least nine “revenue enhancements” that have taken effect since 2009.

Best known is the hospital provider tax. As OCPA analysts wrote last year: “Oklahomans were promised in 2011 that the hospital provider tax—a gimmick used to game the federal government for more money to prop up the dysfunctional Medicaid program—would be temporary. But policymakers, many of them violating a no-new-taxes promise they made to their constituents, extended the tax this year.

“This despite the fact that President Obama’s own National Commission on Fiscal Responsibility (of which our own U.S. Sen. Tom Coburn was a member) has recommended that states eliminate this ‘Medicaid tax gimmick.’”

Wait, that’s not all. It turns out that, once again, Oklahoma taxpayers likely will not see the tax relief they had been promised would begin on January 1, 2015. As this issue of Perspective went to press, the only tax-relief proposals receiving consideration at the capitol wouldn’t kick in until 2016, and even those proposals have triggers which could delay the tax relief even further. And, some policymakers are in fact ready to raise taxes again. For example:

The horizontal drilling tax rate may lapse next year and return to its rate from decades ago. Talk in the capitol building has lawmakers covetous of more than $200 million in new revenue—not so they can cut taxes elsewhere, but rather so they can spend more money.

A state Senate committee advanced two separate tax proposals characterized as tax cuts but which would, through the elimination of certain deductions, increase the personal income-tax burden for some taxpayers. As my capitol press corps colleague Barbara Hoberock reported for the Tulsa World, “Senate Minority Leader Sean Burrage, D-Claremore, said it appears senators on the panel voted for a tax increase so they could hit the campaign trail and tell residents they voted for a tax cut.” Fortunately, it appears those proposals are dead now, replaced by actual tax cuts—which, however, won’t take effect for two years.

Some state bureaucrats and special interests that benefit from the millions of dollars in state excise taxes on traditional tobacco products are maneuvering to increase taxes on e-cigarettes and “vaping” products. These products currently are not considered tobacco products and are assessed the normal (and much lower) 4.5 percent state sales tax. As more people convert to these safer, lower-taxed alternatives, it means a reduction in tax revenues to the state.

Considered in isolation, any one increase in taxes can be rationalized. Taken together—in the absence of broad reform to the state’s taxing structure—they document a distressing pattern: higher taxes, a condition many consider inevitable.

Frustrations for small-government folks over the last few years in Oklahoma were not inevitable; they were the result of choices made by elected officials. Choices which make no sense, given that total tax collections and total state spending in Oklahoma are both at an all-time high. As they say, you can look it up.

Further, as Mr. Small pointed out to me, a review of the Oklahoma Tax Commission’s “Daily Report of Taxes Collected” documents that as of January 31, the Sooner State was on pace to set yet another record for tax collections in the current fiscal year. “According to the report, year-to-date, the Tax Commission has collected more than has ever been collected year-to-date in prior years, even surpassing the abnormally high collections before the recession,” Small says.

Michael Carnuccio, OCPA’s president, captured some of the frustration among conservatives when he wrote last month: “Oklahoma has plenty of revenue and that presents an opportunity—to cut taxes and show belief that Oklahomans can better employ the fruits of their labor than tax collectors and bureaucrats. The failure to do so is not a revenue problem, but a prioritization problem. Actions speak louder than rhetoric.”

The all-but-sainted Prof. Spiropoulos—a lawyer, to be sure, but one emerging as the late historian Rufus Fears’s logical successor in the role of the intellectual most likely to speak truth to power—says our political leaders “must sign on to a tax cut that, without gimmicks or triggers, reduces the highest rate to less than 5 percent.”

It would be a good thing for political leaders in power to keep promises they made in 2010 or earlier. Further, it would be nice if they kept them now, instead of waiting for two years. These things are not inevitable, but they are fine ideas.

Patrick McGuigan (M.A. in history, Oklahoma State University) is editor of He is the editor of seven books on legal policy, and the author or co-author of three books, including Ninth Justice: The Fight for Bork. Last year the Washington Post political blog, “The Fix,” designated McGuigan one of the three best political reporters in Oklahoma.

Patrick B. McGuigan

Independent Journalist

A member of the Oklahoma Journalism Hall of Fame, Patrick B. McGuigan is founder of CapitolBeatOK, an online news service, and editor of The City Sentinel, an independent newspaper. He is the author of three books and editor of seven, and has written extensively on education and other public policy issues.

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