If Oklahoma Republicans desperately want to cut taxes, the grocery tax is the place to start
While there are a lot of things right now in society that divide us, there are two big equalizers.
And, the grocery store.
Each week, tens of thousands of Oklahomans flock to stores across the state to buy food, medications, laundry detergent, and paper towels.
We all maneuver carts down aisles crammed with shoppers or rely on grocery delivery services. We face the same sticker shock at the increases in the cost of a gallon of milk and toilet paper. Unless we extreme coupon, we all pay the same price in the end regardless of what we do for a living.
After all, we all need to eat.
The U.S. Census Bureau reported that in October most Oklahomans spent over $279 a week on food, putting Oklahomans in the Top 10 in average spent.
At the bottom of each receipt is a small line-item outlining the grocery taxes we all have to pay in order to feed our families. While the amount varies from place to place, for my family that amounts to an 8.25% tax.
Oklahoma is one of just 13 states that still forces its residents to pay taxes on groceries. The state automatically collects a 4.5% tax. Munciplicalities, which are heavily reliant on the same revenue stream, tack on an additional amount to support local services.
In recent years, there has been an encouraging groundswell of bipartisan support, pressing for the elimination of, at the very least, the state’s share of the tax.
But the focus has inexplicably shifted.
Instead, Gov. Kevin Stitt and his fellow Republicans in the House have been fervently insisting on a plan to cut the state’s income tax by 0.25%. Stitt even called a special session recently to press the issue.
They promise such a cut would benefit all Oklahoma families.
And, it would to a point.
But the reality is such a cut would have little practical impact on the average Oklahoma family.
Sure we’d all get a few dollars back come tax time, but in most cases, it wouldn’t be nearly enough to offset the taxes the average family pays for groceries over the course of a year.
Let’s be honest. Any Oklahoma income tax cut favors the wealthy in a horribly inequitable way.
The cuts largely benefit millionaires like Stitt and other business and industry executives who already hold an enormous amount of sway when it comes to shaping our state policies and priorities. They’re also coincidentally likely among the state’s highest earners.
Under the 0.25% cut plan endorsed by Stitt and state House Republicans, Oklahomans making at least $619,000 a year — or in the top 1% — would save $2,634 annually, according to an analysis by the Institute on Taxation and Economic Policy released by the nonpartisan Oklahoma Policy Institute.
Oklahomans making less than $23,900 — who comprise the bottom 20% of earners — would net an average $19.
In case you’re wondering, the U.S. Census Bureau reported that our most recent median household income was about $61,000. Over 15% of Oklahomans lived in poverty.
Oklahomans making between $44,000 to $74,900 — in the third 20th percent of earners — would see an average $92 savings under Stitt’s income tax cut plan.
Supporters of eliminating the grocery tax, meanwhile, argue that ending our food tax is much more equitable.
Among those individual supporters is Senate President Pro Tem Greg Treat. His chamber has pushed back against his House counterparts’ calls to cut the income tax. Granted, the full chamber has also pushed back against all tax cut calls recently.
Treat argues that eliminating the grocery tax would net most Oklahomans 5.5 times more than an income tax cut. Our lowest income earners, for instance, could potentially pocket almost $50 compared to $19 from the proposed income tax cut.
As I was preparing to write this, I found a couple of recent grocery shopping receipts that I had randomly stuffed inside my purse.
During a recent grocery shopping trip to Walmart, my family spent $188. Of that, $14.33 went to cover the 8.25% tax, according to the receipt.
Another separate grocery shopping trip cost $91.51. Of that, $6.97 went to taxes.
My family would have saved around $10 on two shopping trips alone if the state’s share of the grocery tax didn’t exist. Over the course of a year, that savings would quickly add up faster than an income tax cut.
Stitt used to be one of the biggest grocery tax cut advocates. On Friday, he told the press that he’d sign a law cutting the grocery tax — if it reached his desk before the income tax cut. The Oklahoman reported that Stitt described the grocery tax as “the most repressive tax that we have.”
If Republicans are truly hellbent on making tax cuts, we should probably focus on ones that aren’t regressive.
The rich aren’t the Oklahomans who badly need relief in a time of inflation.
And it’s safe to say, the average Oklahoman does not want to further subsidize the top 1% by dramatically decreasing their tax burdens.
Oklahomans want and should demand their legislators pass tax policies that are equitable.
Cutting the grocery tax — even temporarily — seems to be the most equitable path forward for everyone.
After all, we all need to eat.