Inkwell Institute

Budget Deficit Series #7

For years now I have been writing about taxation and fiscal policy….on how tax revenues are the sole source that generates money for the states and the country……and to cut taxes in times of deep economic problems is more of a give away than entitlement programs….

Allow me to qualify what I am saying….

Sales taxes on groceries would be eliminated once the state’s economic condition approves under a bill that has passed the Oklahoma Senate.

The bill would eliminate the sales tax on groceries once state revenue collections return to where they were before the economic downturn.

The bill also has a provision that would require the state to reimburse local cities and counties for sales taxes lost on groceries.

In my state there is a similar bill in the legislature but it has not yet passed……there also other forms of tax cuts being offered also….

Where I have a problem with this the fact that of reimbursement….yet another problem, even though a future problem, for local governance……the money that is being given away by cities and states just to try an lure business will not be replaced….that is why it is called a “GIVE AWAY”……..

Legislatures are looking short term and a political benefit and are ignoring the long term beast they are creating….this will come back and bite somebody in the ass!  This is just a way to gain politically for the guys in charge….yes it will save people a bit of cash….but keep in mind that the lost revenue WILL be made up as soon as they can…..so if anyone is to be bitten in the ass…..it will be YOU!