When Is a Tax Not a Tax?

When is a Tax Not a Tax? - May 22, 2016

State Representative David Perryman

The Treaty of Paris in 1763 ended what could actually be referred to as the FIRST world war. Known in North America as the French and Indian War, the Seven Years’ War involved nearly every region of the world and virtually every nation, kingdom and colony were engaged.

While the outcome of the Seven Years’ War established England as the true world power, it also plunged it deeply into debt. In response to the oceans of “red ink,” Great Britain sought new sources of revenue to fill its budget hole.

England despised the fact that for decades the American colonies had engaged in free trade with the French West Indies largely neglecting to render taxes to the British crown. Shortly after the war, Parliament reasoned that if it stepped up enforcement efforts, apply the taxes to a greater variety of products it would increase overall revenues even if the actual rate of taxation was slightly lower.

This new law came in the form of the Sugar Tax Act of 1764. Coincidentally, the Oklahoma legislature has proposed the same strategy in broadening the types of goods and services that are subject to sales tax and growing the enforcement division at the Oklahoma Tax Commission. Even though the British plan was and the Oklahoma plan is intended to increase revenue, both Parliament and our legislature vehemently denied that the plans were tantamount to tax increases.

Still needing revenue, Parliament in 1765 enacted the Stamp Tax Act requiring that every colonist be assessed a stamp tax for each piece of printed paper they used. The list of taxed items included ship’s papers, bills of lading, legal documents, licenses, newspapers and even playing cards.

Coincidentally, Oklahoma imposes its own real estate Stamp Tax that for decades has been 75 cents per $500 value of each real property transaction. In an attempt to increase revenue, the legislature has proposed a 33.33% increase in our stamp tax. That would increase the transfer tax on the median Oklahoma home to more than $250. Curiously, the tax increase bill contains a provision that redefines the tax as a fee in an attempt to avoid the Constitutional mandate of a vote of the people or a supermajority vote of the legislature.

Likewise, a few days ago, the legislature imposed a new, additional Five Dollar tax on all tag renewals under the pretense of paying for the issuance of a new tag design. Frustratingly, the cost of the new tag will be less than 20 percent of the revenue generated by the tax with the remaining millions of dollars going to fill the budget hole that was caused by decreasing income taxes on the wealthy and handing out tax credits to corporations. It feels like a tax, but it is called a fee.

The tax antics of King George and Parliament precipitated the solidarity of the Stamp Act Congress and ultimately the Sons of Liberty’s unconventional disposal of 46 tons of British East India Company tea into Boston Harbor on December 16, 1773, in their protest of this “taxation without representation.”

In retaliation, the British Parliament enacted the “Intolerable Acts” to punish the colonists for their defiance. In fact, the British called them the “Coercive Laws.” Coincidentally, the legislature utilizes its own coercive tactics any time citizens question, inquire or attempt to hold legislators accountable.

Teachers are punished for coming to the Capitol seeking relief for public education. Higher Education receives double-digit budget cuts for attempting to solve its funding crisis without obtaining the prior blessings of the legislature.

A government that represents special interests and not the people is no better than one that imposes taxation without representation. It took the power of the people to rid the colonies of British tyranny. Only the people can reverse the current course and reclaim a government that values its citizens. Maybe they will before it is too late.

Questions and comments are welcome. David.Perryman@okhouse.gov or 405-557-7401.