OKLAHOMA CITY – While teachers continue to fight for an increase to education funding, one organization is worried that one of their demands could have a negative impact on their industry.
Although a couple of revenue raising measures are heading to the governor’s desk, the OEA says more needs to be done before the walkout can end.
On Tuesday, the OEA announced that it is encouraging its members to lobby the governor and the House of Representatives to pass two pieces of legislation.
“Lawmakers need to find $50 million more in funding to make good on promises made to Oklahoma students. They have plenty of options, such as SB 1086 (the capital gains bills) or SB 888 ( a cap on wind tax credits). We encourage them to take these last steps!” the OEA wrote on its media notes.
Senate Bill 1086 would reinstate the capital gains tax, which is expected to generate millions of dollars for the state. The capital gains tax deduction was passed in 2004 and allows taxpayers to exempt from their taxable income any gains from the sale of property or stocks located in Oklahoma.
According to Oklahoma Policy Institute, the deduction almost entirely benefits wealthy business executives and investors. Officials say that nearly three-quarters of the benefit goes to taxpayers making over $1 million annually. Most middle class households are already largely exempt from the capital gains tax under federal law.
However, Oklahoma farmers and ranchers say they could be negatively affected if the bill passes.
“They’d pay property tax on their land, they’d pay a capital gains tax on their land, and then if 1086 goes through, they’d pay state income tax on that gain and so that’s just something we’re not in favor of in that sense,” Michael Kelsey, the Executive Vice President of the Oklahoma Cattlemen’s Association, told KSWO.
Sen. Roger Thompson, the Senate finance chair, agrees that repealing the capital gains tax exemption would hurt small businesses, farmers and ranchers.
“If you go out to your stockyards and you sell all your cattle, you immediately begin to pay capital gains on what you’ve made. Do you have time to go back and invest in more cattle?” Thompson said. “Same way with small businesses.”
According to the Oklahoma Police Institute, only a small percentage of people using the capital gains exemption are farmers and ranchers, and the rest are outside of the agriculture business.
On Tuesday morning, the House adjourned without hearing the capital gains bill.