The tax increases for funding the Step Up OK plan are mostly regressive, as it will affect middle and lower income Oklahomans much more than the wealthy and corporate. For example, the $1.50-per-pack cigarette tax increase will affect lower and middle income tax payers more so than the wealthy because all sales tax increases are regressive, so it is for the 6 cent increase on fuel as well. The "personal income tax" adjustment will also affect lower and middle income Oklahomans more than it will affect the wealthy as most Oklahomans who earn less than $50,000 annual salary will have a higher percentage of their income taxed than millionaires do. Also, the taxation of little cigars and a 10% tax on chewing tobacco will affect only the lower and middle class, not the wealthy or corporate.
The "simplification of individual income tax" is, in fact, an increase in the individual income tax rates, while the corporate income tax rates will stay the same or be reduced. It's no small wonder that the "oil and gas CEO's" (Oil Overlords) are supporting the tax increases in Step Up OK. As a friend believes: The oil and gas overlords are committed to doing their part for solving the state budget crisis and providing teachers a $5000 pay raise, as they have "pledged" $133 million to the Step Up OK plan. Under the "Plan", the overlords will see an oil and gas gross production tax increase from 2% to 4% on all their oil and gas wells, which will result in a $133 million windfall for the state to spend. Wow, how generous of them! But let's take a closer look at the Overlords' generosity, to analyze what it really means:
Oklahoma Statute Title 68 Section 1009(D) reads: On oil and gas sold at the time of production, the gross production tax shall be paid by the purchaser of such products, and such purchaser shall, and is hereby authorized to deduct in making settlements with the producer and/or royalty owner, the amount of tax so paid. ... provided, that in the settlement with the royalty owner such producer shall have the right to deduct the amount of such tax so paid on royalty oil or to deduct therefrom royalty oil equivalent in value at the time such as tax becomes due with the amount of tax paid...
What sounds like legalese BS is what the oil producers use to shaft the ignorant land and royalty owners, but you read it right - Oil Overlords have the right to deduct their GPT from rancher and farmer royalty owners checks! or at least what amount is settled on by the Overlord and the rancher. Most ranchers and farmers didn't even know they could negotiate the deducted fee, but even if they did, and tried to negotiate the paid GPT fee, it is very unlikely a rancher could negotiate anything less than the entire GPT. The Oil and Gas Overlords continue to perpetrate the canard - that they are in fact paying the GPT, when it is actually the ranchers and farmers who are shafted. (Note: The same oil and gas attorneys who wrote OS Title 68 Section 1009(D) are the negotiators which negotiate with ranchers on the GPT fees). I saw a real royalty check to a land owner from an oil company in the amount of $76.44. The provided check was originally for $78, but a $1.56 (2%) Gross Production fee was deducted, making the final amount $76.44. When the GPT increases to 4%, $3.12 will be deducted from the royalty check, making the land owners royalty only $74.88...
The bottom line is this: The oil overlords are supporting the Step Up OK plan because they will just pass the GPT increase on to the land owners. It will not take one thin dime from Larry or Harold. They will still be multi-billionaires, so they have given permission to their corporate cronies for Step Up OK to proceed. We can hear the violins playing as they sacrifice for Oklahoma. Many corporate legislators will vote for the tax increases on the middle class and it will pass with flying colors, as their corporate bosses have given the green flag. The corporate overlords and their corporate minions will be "heroes" once again... but our rancher and farmer land owners will pay the bill and should be the real heroes.
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