Reality matters

November 5, 2012

The left often likes to say that tax rates don’t matter, and that companies are indifferent to changes to taxes solely to increase revenue for government to spend. Champions of more government and dominant union power, those committed to a war on fossil fuels and energy producers, and lovers of regulation want us to believe that incentives or obstacles don’t matter. This is not reality.

For those who say or act as if tax rates don’t matter, they should have attended much of my recent mandatory continuing professional education (CPE) to maintain my Certified Public Accountant (CPA) license. In my classes, (and across the United States) CPAs were trained to be aware of the looming “taxmaggedon,” to understand how to help clients arrange realization of capital gains by selling their hard-earned investments by the end of the year, and to understand a host of other lawful tax-reduction plans. The reports of successful business owners, even a Hollywood giant, selling their businesses to avoid the significant tax increase on capital gains and other economic activity doesn’t fit the narrative of the president and the left, but it’s reality.

For those who say or act as if the Obamacare tax hikes don’t matter, they, too, should have attended my CPE classes. In those classes, CPAs were trained on how to help businesses avoid the Obamacare tax penalties by doing things like limiting or firing enough employees to stay under the requirement to provide health insurance coverage. We produced schedules to demonstrate to clients that the tax credits and subsidies for business owners who provide health insurance fall woefully short of the cost of Obamacare-compliant insurance policies. The reports of employers dropping coverage, dropping employees or cutting hours because of the destruction of Obamacare doesn’t fit the narrative of the president and the left, but it’s reality.

For those who oppose individual liberty and the principle of “right-to-work,” the recent hurricane disaster in the northeast provides a harsh but valuable lesson. The reports of confusion regarding whether non-union utility workers from other states can provide help in New Jersey to get power to people without power doesn’t fit the narrative of the president and the left, but it’s reality.

Multiple local (some funded by state taxpayers) and national assaults on fossil fuels and energy producers are striking. The culprits want everyone to join their jihad against what they loathe. But, as a current member of the Board of Trustees for the Oklahoma Teachers Retirement System, I personally know and witness that a war on fossil fuels and energy producers is a war on the pensions owed to and received by Oklahoma teachers. For example, the OTRS currently has more than $518 million invested in consistently performing energy-related efforts and businesses, which yield some of the necessary funds to pay teacher pensions. The fact that numerous investment custodians regularly discuss the challenges faced by leftist policies and its impact on OTRS and public pensions doesn’t fit the narrative of the president and the left, but it’s reality.

Tomorrow, with an unwavering commitment to the politics of envy, the left in Oklahoma want Oklahomans to focus on the left’s contrived “boogeyman,” AT&T, as it relates to preventing the taxing of intangible property. According to the left, the pro-growth opportunity posed by state question 766 should be ignored. As OCPA has noted previously:

In consideration of SQ766, it should not surprise citizens that yet again the left plays the 'envy' trump card by trying to get citizens to focus only on large businesses who would be exempt from intangible property taxes. Inciting envy and covetousness is their chief tactic. In fact, citizens should know that pro-growth opportunity is just around the corner every time the 'envy' card is played. The experience of other states reveals that once “Pandora’s box” of taxing intangible property is open, eventually government bureaucrats are picking winners and losers and are valuing and assessing taxes on things like a reputable name of a small family business, an interest in a public pension, 'sweat equity' in a business also known as goodwill, interest in lease payments and a host of other intangibles left up to the imagination of assessing bureaucrats. To downplay this reality, the left and some tax users with insatiable appetites advocate for the status quo, where arbitrarily the businesses that are the targets of envy pay intangible property tax. Also as expected, there are conflicting predictions about the potential for loss of revenues.

The fact that taxing intangible property is often double taxation and that taxing intangible property will adversely affect large and small doesn’t fit the narrative of the left in Oklahoma, but it’s reality.

Reality matters, no matter who chooses to ignore it.