By Rep. Jason Murphey
If I were a sneaky out-of-state resident who desired to sabotage Oklahoma and ensure its continued dependence upon the capricious whims of the energy sector, I should think my best strategy of attack would be to propose the creation of a new Oklahoma “services” tax.
The new tax undoes some of Oklahoma’s greatest economic strengths and requires its greater dependence upon the energy sector by poorly positioning the state for future economic growth.
Two weeks ago, I described the great harm the tax will wreak upon one of Oklahoma’s most attractive characteristics, the affordability of housing costs.
The great damage of this tax isn’t limited to its destructive impact upon Oklahoma’s current economic strong points; it also shows a shocking disregard for the state’s ability to evolve with the modern economy.
Venues from across the world are now competing in the information technology economy, and this punitive new tax seeks to leach upon that economy.
It’s a 21st century competition for the ever growing group of location independent professionals who have the luxury of doing their work from their computer, no matter where they are located.
Oklahoma’s low cost of living gives it a natural advantage in this regard. An independent entrepreneur can contract with a technology startup from the venue of a low-cost and hospitable Oklahoma small town. Because of technology, he doesn’t need to relocate to a more expensive jurisdiction.
This is a great benefit to this individual. He currently has a competitive advantage over the other technology contractors because of the low cost of living in Oklahoma.
Unfortunately, a cash hungry and archaic state government is considering taking away this advantage.
The imposition of a services tax may require the Oklahoma contractor to charge and collect taxes on his work. This will create not just a bureaucratic headache, but will put him at a great disadvantage to those who live in business-friendly venues and who do not have to meet this onerous requirement.
Worse, because the contractor can do his work from anywhere in the world, he is well advised to leave the state that taxes his services as soon as possible.
There are many business-friendly venues that appreciate the potential of the location independent entrepreneur and he will have no problem finding one of these venues.
Once he has left the state, this person will no longer pay state incomes taxes, sales taxes, gas taxes, property taxes, or the myriad of other fees that state government imposes. The state will also miss the intellectual capital of that person’s work product.
There are mega companies of the future that are now being developed by location independent individuals and small start up firms. These persons and firms know no geographic constraints except to avoid punitive high tax and paperwork inducing bureaucratic venues such as the one envisioned by those who are endorsing the new “services” tax.
Those who are pushing for the tax are doing an incredible disservice to the state’s economy of the future.
We will never fully realize the intangible and long term harm the new tax creates.
