Rep. Murphey: Aggressive government is not better government

During the past few weeks, legislators made numerous efforts to scrounge up extra cash for the government by eliminating tax deductions, increasing fees, and stepping up tax enforcement protocols.

I consistently oppose attempts to increase fees and taxes by insisting that state government should become more efficient. Tax and fee increases simply enable the Legislature to avoid its responsibility of requiring this efficiency.

I am also hesitant to approve increased tax enforcement protocol. I have observed that when legislators make a grab for cash, the new regulation falls on the taxpayers who have already been struggling to navigate and survive the already-existing labyrinth of government regulations.

This sentiment was reinforced a few days ago when I received an email from an area business owner.

He recently received notice that he now has to file an estimated “sales tax report” and pay an estimated sales tax collection tax at the beginning of the month, plus he has to pay an adjusted balance on the 20th of the month.

“I used to have file only on the 20th of the month. Now the state has added more red tape to my business which takes away productive time from growing my business to fill out paperwork and prepay my sales taxes. I know that if I overestimate, I will not receive interest on the loan I gave to the state but if I am late, I will surely be penalized. I guess this is another way to fund the state on the backs of its businesses ahead of the normal sales tax due dates,” he said.

“What they do not understand is that some businesses carry an accounts receivable and not a retail point of sale where the monies are collected at the time of the transaction. That means they will carry that invoice out 30 days or more before getting paid – which, in many cases, is beyond the sales tax due date. So that means the business has to use its own capital to pay the tax, or suffer the penalties. In today’s market when cash flow is tight, a business owner will have to make the decision whether to pay rent, utilities and his employees, or pay the sales tax on uncollected invoices. Unless the business is well funded or has a good factor behind them, this is a hard decision to make. More than likely, they will pay their employees first with the cash on hand since the sales tax has not been collected from the customer yet.

“But the state does not care. You wrote the invoice, sold the product and charged the tax, so whether it has been paid by the customer or not, you WILL pay ahead of time or they will charge you penalties and interest and possibly shut down your business.”

“We as business owners have hard decisions we must face every day. Another layer of government is not something we really need,” he concluded.

In the bubble that is the Oklahoma State Capitol, far removed from reality, Oklahoma policy makers may think that requiring pre-collection of sales tax payments will have a positive impact. However, in the real world, this may have the opposite effect and instead may cause existing small businesses to close down and discourage the startup of new businesses.

When the Legislature writes its budget and depends on gimmicks such as “pre-sales tax collection,” it very likely fails to take into account the damage to the economy this overregulation causes. This means the budget is based on “ghost numbers” that may never materialize.

It’s emails such as this that remind me to view all tax collection enhancement proposals with great skepticism, preferring to side with business owners and taking into account the harmful effects of overregulation.

Thank you for reading this article. Your interest and input are much appreciated. Please do not hesitate to email Jason.Murphey@hd31.org with your thoughts and suggestions.

Sincerely,