POSTED ON JUNE 22, 2011:
The Gospel According to Tom
Sen. Coburn breaks from party line that Gov. Fallin continues to toe
One day and half a continent apart, two of Oklahoma's political elite offered a rare public glimpse of the breadth of the philosophical divide that threatens to torment Republicans for years.
In Washington, GOP Sen. Tom Coburn led the charge to repeal $6 billion in ethanol tax subsidies -- heresy to government haters like Americans for Tax Reform poobah Grover Norquist who equates ending corporate welfare to the unpardonable sin: increasing taxes.
Even more jarring was that Coburn told MSNBC's Lawrence O'Donnell: "Between now and the next year, as we go to solve this problem, everybody knows there's going to have to be a compromise on some sort of revenue increases ... We're going to fix the country, and some of that is going to be revenue increases, that's the only way you're going to build a compromise and get it signed by this president.'
That, indeed, was an audible gasp you heard, emanating from Republican parlors across the land. Dr. Tom not only acknowledged the government would need more money to fix America's problems, but also dismissed Norquist, one of the leading evangelists for Ronald Reagan's anti-government, anti-tax gospel, as "old news."
The next day in Lawton, by contrast, Gov. Mary Fallin embraced the more traditionally Republican, supply side approach -- renewing her call to eliminate the state's personal income tax and replace it with ... who-knows-what.
Forget for a moment that the income tax is the fairest tax of them all -- based on ability to pay. Or that Oklahoma faced a half-billion-dollar budget hole this year alone. Or that many state agencies endured 30 percent budget cuts over the last three years.
Or that the personal income tax accounts for one-third of all state revenues.
"It's not something you can do next year," the Associated Press quoted the governor as saying. "You have to have money to operate state services. We want to find the best way to fund essential services."
Fallin knows that eliminating the state income tax is a real crowd pleaser, especially when you're hangin' with the folks who stand to benefit most from its demise -- the silk-stocking, State Chamber set.
But the governor also has been around state government long enough to know there are only so many ways to generate the revenue necessary to build and maintain roads and bridges, employ highway patrol troopers and teachers, imprison criminals and investigate child abuse.
Coburn and Fallin: Two Republican leaders, two different approaches to governing, one daunting fault line in the GOP's three-decade fealty to Reaganomics -- or as former president George H.W. Bush put it, "voodoo economics."
What GOP leaders, especially in Oklahoma, are learning is that it's much easier to be on the outside, lobbing the political equivalent of Molotov cocktails and reciting slogans ad nauseum, than it is to actually be in charge and make things work.
Last week, Coburn attempted to make things work, while Fallin stuck to the company line. Coburn poked Norquist in the eye, while Fallin told the state's moneyed interests what they wanted to hear.
I don't need all the fingers on one hand to count the number of times I've agreed with Coburn, whose sanctimony often wears me slick. But he is absolutely right on the ethanol subsidy -- and that you can't just cut your way to solving America's problems.
You see, it's going to require some give-and-take from both sides of the congressional aisle to produce the right remedies -- America first, partisanship and political power a distant second and third, respectively.
Oh, some will no doubt assert that Coburn's play was purely in his self-interest. He not only won considerable face time on network television -- clearly one of his favorite pasttimes -- but also elevated himself as a serious player in Washington and polished his self-styled image as pit bull when it comes to taxpayers' interests. The cynics will counter, of course, that Coburn's actions weren't so noble, suggesting he worked to eliminate ethanol subsidies because their demise will benefit a key constituency: Oklahoma's oil and natural gas industry.
Perhaps. Or perhaps Coburn doesn't intend to run again and doesn't care about offending the GOP's powers-that-be. Or perhaps he targeted ethanol subsidies as a first step toward reviewing more of the Congress' tax giveaways. Or perhaps the king of Senate holds is coming to realize that gumming up the works isn't a real strategy for moving the country forward.
Fallin's call to eliminate the state's personal income tax suggests longtime GOP rhetoric still trumps political reality -- at least in Oklahoma.
Despite the $500 million budget hole this year, state Republican leaders refused to delay or repeal a quarter-percentage-point cut in the state income tax that was set in motion during better economic times.
Why the reticence? They were scared witless that they would be accused by Norquist and Co. of increasing taxes. You see, in the Norquist-istas' parallel universe, you don't have to actually raise taxes to be accused of raising taxes -- you just have to eliminate tax breaks or tax cuts.
Fallin's proposal is straight out of Norquist's playbook: "I don't want to abolish government," he famously said. "I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub."
Here's the problem: Roads, schools and prisons don't magically appear. A bunch of someones has to pay for them. Those someones are the taxpayers. If the state's personal income tax -- among the nation's lowest at 5.25 percent -- is eliminated, sales and property taxes, among others, will go up.
The sales and property taxes disproportionately affect the poor and those on fixed incomes (seniors -- are you listening?). Ask your friends in Texas about property taxes. And ask retailers about an increase in sales taxes (already among the nation's highest): They fear buyers will turn to the Internet or cross into other states to make purchases -- all in an attempt to reduce the sales tax burden or avoid it altogether.
The Oklahoma Policy Institute's David Blatt, the state's leading independent budget and policy analyst, says there's another reason it's wise to keep the personal income tax: "You want a broad and diverse tax base," he says, "and not put all your eggs in one basket" to ensure as consistent a flow of state revenues as possible.
Relying on too few revenue sources could leave the state vulnerable to even wilder fluctuations than it traditionally has experienced with a boom-bust economy so dependent on three often volatile industries: oil, natural gas and agriculture.
Coburn's willingness to buck Norquistism offers hope that serious governing finally may trump political gamesmanship in Washington. If Fallin pursues a similar strategy -- truly seeking the fairest tax system possible and working to abolish unnecessary corporate tax breaks -- Oklahoma finally may reach its potential.
-(Arnold Hamilton is editor of The Oklahoma Observer; okobserver.net)
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