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On Friday, anti-tax signature gatherers are expected to deposit enough valid signatures to the Oregon Elections Division in Salem to force a referendum on the $733 million tax package passed by the Oregon Legislature this year. The Democrat-controlled legislature passed these hikes to deal with a huge budget shortfall and a terrible economy. Republican lawmakers were against the tax increases from the start. It was not surprising when a signature-gathering campaign began. And political observers, like Jeff Mapes, say it won't be surprising if sufficient signatures were received. (The campaign will announce the precise number at noon.) The referendum would then go in front of voters on the January 26 ballot.
Were you approached by signature gatherers? If so, what did you do? And what do you make of the the referendum itself? Will you vote to keep — or drop — the income and corporate tax hikes?
Guests:
- Dave Hunt: Speaker of the House for the Oregon House of Representatives
- J.L. Wilson: Vice president of Government Affairs for Associated Oregon Industries
Tagged as: income tax · january 2010 election · referendum
Photo credit: shyb / Creative Commons
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As a strong proponent of public education and the father of 2 school age children, supporting this tax increase is a given. What is dissappointing is the Governor and Legislature crafting yet another reactive revenue measure. When will they have the intestinal fortitude to create a multi-faceted revenue system and eliminate the kicker? Enough with the "blue ribbon" panels and additional "studies" of Oregon's taxation system!
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It's improtant to note that under the new corproate minimum plan, no business would pay more than one-ten th of one percent of gross Oregon sales.
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As an active student at Portland State University, these referenda would cause the Oregon University System to be further bled dry of need funding. The tuition has been rasied to the point that some students are wondering of they are able to graduate with a huge burdensome debt on their shoulders.
PSU has had to take substantial cuts in services and instruction and will be asked by the OUS Board, along with University of Oregon and Oregon State University, to give up some funds to help the regional and satellite unverisities to survive. When is enough "enough"?
The real issue behind all of this is not only the unwise and follish investments that the high rollers in Wall Street have done in the last year, but is this state's tax system. K-12 education needs to be funded back at the local property tax level. This way, local people would be more invested in their schools. This will free up more funds for the statewide services, including higher education.
One last question needs to be asked of every person that lives and/or invests in Oregon: When is education going to be a top priority and how would all of Oregon be able to access this valuable service without it being so overly burdensome?
Thank you.
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Corporations worked very hard for many years to get legally defined as "persons" just like a real, living, and breathing person, and they ought to be fully taxed as the "persons" they fought to be.
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Amen.
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How can you be herrmoraghing when you have $100 million in Oregon sales. That's the level of sales you must reach to pay $100,000 in the corproate minimum.
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Because you have a manufacturing plant that costs you $110 million to operate.
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If someone has a $110 million dollar plant, then with business operations deductions, they won't even be paying the full $100,000. maxgramm has it right.
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I don't remember mention of a business operations deduction. How's that work? If it works the way I think you are implying this sounds even more like a sales tax, albeit a really, really low one.
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As an Oregon business owner for the last 17 years (and green too - well whodda thunk?) with several employees, I think it is high time for Oregon businesses to get back in the direction of paying a reasonable share of state taxes.
I think the structure of the modest business tax increases passed by our legislature is fine - not perfect, but about as good as we're likely to get on this kind of thing.
And I'm really tired of those many groups that pretend to speak broadly for business interests while really just espousing anti-government, anti-social, simplistically-self-interested ideologies.
Good business thrives in good communities, which require a decent balance of spending between public and private interests. Even in this economy, the wealthy are doing much better than the rest. Now, as much or more than ever, wealthy people and businesses (categories which overlap) need to pay closer to their fair share.
Congratulations to our Oregon legislature for getting these pieces just about right!
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Why don't we start by introducting transparency into the amount of taxes being paid by Oregon's largest corporations. Why can't the citizens of Oregon be informed of how much state tax corporations like Intel and Nike are paying?
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Intel and Nike primarily export. I don't think they'll be paying as much under this proposal as one might think.
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Our current economic problems are the result of some thirty years of Conservative sponsored tax cuts for the wealthy and their businesses. They have gutted our schools, State Police services, counties, and cities. They have redistributed wealth from the middle and lower classes to the already wealthy. It is time to restore Oregon to the fair tax structures of 30+ years ago.
This Wilson fellow is just fear-mongering about job losses. The fable of "Chicken Little" was written about people like him.
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It seems to me this is a sales tax by another name. They are taxing businesses based only on Oregon sales. Low margin, high volume businesses like grocers and gas stations will pay the most tax and have no choice but to pass it along to consumers.
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The other side of taxes that never gets talked or written about is who benefits from Oregon taxes, and the reality is that Oregon Industries and the wealthy get the disproportionate benefits.
Cui Bono.
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Fact #1: Our state spending went up 21% in '07-'08, will climb $2 billion, or 4%, in '08-'09 with this budget. Anyone in this state increased their household spending 25% over the last 2 years?
Fact#2 Oregon will have the 2nd highest income tax in the nation: ahead of CA (10.55%) and slightly behind NYCity (12.96%).
Take a look at California's economy - businesses heading out, increasing dependence on income tax, for glimpse at where we're headed. Answer = equal sharing of tax burden, not disproportionent burdening of a few.
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Can you imagine having to pay income tax when you lost money? This is what we are saying is fair for Corporations. I agree we need to increase taxes, but we don't want to hurt the businesses that are supporting our communities by providing jobs.
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He just said that Oregon businesses pay 43% more in taxes than they receive in benefits. Since when are we only supposed to pay taxes when they directly benefit us?
I don't consider my taxes going to the war in Iraq to benefit me, but I still have to pay them.
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He was obviously dissembling.
Our schools educate their workers. Our governor flies to Asia to promote Oregon businesses, Oregon government promotes Oregon for travel and vacations, on and on.
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This must be a topic about principle rather than practical effect. $150 tax/year? That's pretty small. Almost anything a business might pay for (wash windows, clear a stopped drain, paper towels, etc) might cost more. Why are people so excited about this? Is this just a case of "not one penny more"?
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Exactly. Well put!
The referral of these pieces of legislation to the voters is partly knee-jerk ideological response, and partly self-justification/political organizing tactics by groups like AOI and other anti-tax political operatives.
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Agreed, $150 is nothing. Any real C-corp is spending 5 to 10 times that much just filing their returns. And an extra $140 to the state is not going to fix any billion dollar budget hole.
I think the ideological response is a two way street. There are people that HATE that some corporations might be paying only $10 in tax. Are they really going to be mollified over $150? For how long?
The problem is the legislature creates all kind of tax breaks, loop-holes and give-aways then gets upset when corporations make too well use of them. Actually closing the loop-holes is a non-starter, since those can be used to curry favor and donations from the special interests that lobby and benefit from them.
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but the minimum is never more than 1/10 of one percent of gross oregon sales, Alan.
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Never say never. ;-)
Here's something to consider: sell timber to mills in Oregon, pay the tax; sell timber to mills in Washington, don't pay the tax. This is how taxes can have a negative impact on employment in ways that may not seem obvious at first consideration.
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AllanFolz causes another question: Which is cheaper, pay the Oregon tax ($140 more), or pay a little more in transportation [say, 100 miles more to WA than OR mill ($12 fuel + $20 driver) X 50 shipments/year ] to ship logs to WAshington and not pay the ORegon tax? Is either cost significant compared to their total cost of doing business?
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$10 million in logs is not an extra $140 in tax. It is an extra $10,000 in tax at a 0.1% rate. Of course the 0.1% rate is not set in stone. A future legislature could raise it to 0.5% or 1.0% or 1.5%.
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You know its funny, when i lived in CA 8 years ago, I payed less in taxs and made more money than I do now. Now that I live in OR, I pay more and make less, This all comes down to a sales tax, if we put a sales tax into place we all would pay less in taxs ( specificaly state income) and would have more money in the coffers. but for some reason people dont get that.
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I agree. I wish we could trade the property tax or income tax for a sales tax ( I said TRADE, meaning if sales tax then NO property or income tax). At least with a sales tax you have a choice: don't buy so much stuff. But you have to live somewhere (propery tax) and work (income tax) to live; not much choice on those.
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Why does Dave Hunt keep blaming the Business Alliance? Why can't he defend the tough questions about the tax on its merits? Who are the members of the Business Alliance? One wonders if they are primarily large exporters.
Sell fruit to packers in California, no tax due. Sell cheese to Oregonians, tax due.
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brian,
Remember here the increase is only on the margain over $250K (125K for individuals). So for every 10K more you earn in AGI, you would pay $180 more in taxes. That seems pretty reasonable. And remember, after four years, all those rates roll back down to 9.9%. I agree that our rate is high, but since the increase is only on the margin, then it is much less than most people think.
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Putting a tax on the gross income of businesses, just shows how little our politicians know about running a business. Some large grocery stores operate on a 2 to 3 percent profit margin. Start up companies, which may have high sales, but stilling paying startup cost may have very little profit. Having them pay taxes on their gross sales may contribute to them not being able to stay in business. Jim
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Please take a look at the actual numbers.
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Brian,
Much of the increase in state spending is due to the fact that ORegon will bring back $3.5 billion more in federal dollars to pay for schools, health care for uninsured kids, food stamps and other aid for the many people out of work. When you look at general fund anbd lotttery spending from the beginning of 07-09 biennium to this coming biennium, it's actuallly down in real dollars. That's the state tax dollars you pay.
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Lost jobs due to the business tax increases? Scare tactics. We see them alot these days.
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The "business sector _finally_ stands up for itself". These guys crack me up.
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Business guys like Wilson always use the threat of job losses, like a political form of extortion, to get their way. No thanks, I'm not buying that line any more.
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I was approached by the signature gatheres and I signed... and I'll vote to repeal the tax increases. I'm tired of expansive programs being put in place during good times that require income tax increases during difficult times (that don't expire, so it sets the cycle up to repeat itself).
Cut them or find a tax with a net positive incentive... I'd vote for a $0.50/gal gas tax increase in a heartbeat.
In the meantime, my wife and I decided that for every $1 taxes go up in the future, we're going to cut back local spending $3 and are encouraging friends/neighbors to do the same. We've already dropped our yard maintenance service as a result of the property tax increases this year.
As we are in the minority the income tax targets, we see a progressive boycott of Oregon businesses as the only way to be heard above the cacophony crying for their services.
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I love all the things this tax would support. But the sad truth is I have nothing else to give. The family company is on life support, extra fees anywhere could break us. That would mean 10 people out of work. I know this tax would help alot of people but I just can't support it knowing that it would be one more nail in my coffin.
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We need more journalists getting the accurate information out. As noted at <a href=http://www.blueoregon.com/2009/09/accountants-and-journalists-get-the-facts-straight-on-the-revenue-measures-and-stop-scaring-people.html>BlueOregon.com, too many journalists are not asking the right questions.</a>
And as noted at <a href=http://www.ocpp.org/cgi-bin/display.cgi?page=nr20090925YesMea>www.ocpp.org, voters need to say "yes" to the tax measures</a>.
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Part 2
Before this downturn is over (i) labor will realize we've been snookered into exchanging 1/3 of our lives for worthless paper, (ii) everyone will recognize that Government is not the solution to every challenge, that fostering dependence on Government is self-destructive.
Government is force. Force always generates withheld cooperation and push back. Force is counterproductive. Force cannot improve the Oregon economy.
It’s not sane to increase taxes knowing the probability of voter backlash is near 100% and then sit back and make no contingency plans, waiting until February to see what happens. The time to solve these problems is NOW.
To discover new, innovative solutions I suggest we begin with a new assumption - that government solutions are not an option. Yes, we want community colleges and excellent education. Even without the downturn Government performance in these areas has not been satisfactory. We can do much better.
How do we achieve excellence if the State is Dollar constrained, even bankrupt? Or do we just sit and moan, not knowing what to do for ourselves without some politician making us promises of a better future, promises he cannot keep.
The best helping hand is at the end of your own arm. Learn to use it without asking for assistance except from family, friends and others who are self-reliant.
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Part 1:
This downturn is unlike any other we have experienced in our lifetimes. Solutions too need to be unlike any others.
When competent people are unemployed there is a reason. This time the reason is a terminally ill Dollar. Washington’s Dollar based policies are dragging Oregon down. Yes, it seems strange, but we must sever economic ties from the source of our distress to discover Oregon solutions.
A healthy bureaucratic sector requires a healthy voluntary sector. Yet every solution on the table takes from the voluntary sector.
Taxing the rich is an illusion. Capital moves easily to where it is welcome. Left behind to pay are the rest of us.
We need:
1. Debt forgiveness, a Jubilee of Biblical proportions because debt is inhibiting any recovery. The Dollar is debt based. We need a fresh start, a clean slate.
2. A state economy based on a new Oregon currency, one with intrinsic value and ideally tax free. First steps might be to emulate North Dakota, which owns its own bank, or issue Oregon Script to pay all State obligations, accepting Script for all taxes and fees. (We ought to be smarter than California and learn from their example what not to do.)
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Comments are now closed.
I work for a local community college, and as a result of the economic meltdown and the subsequent budget shortfall, we are starting the 2009/2010 school year this Fall after having been forced to lay off large numbers of staff and faculty, cut operating budgets, impose a hiring freeze throughout the institution, increase class sizes, and otherwise attempt to do much more with far fewer resources. This problem is exacerbated by the fact that due to the economy and the job market, enrollment is at or near an all-time high. Everyone is thrilled that enrollment is up, but resources in every department are stretched to the breaking point. If indeed there are enough signatures gathered to bring this referendum to a vote and it passes, further cuts in personnel and services will undoubtedly have to be made.
I appreciate that nobody likes the thought of paying higher taxes, whether they are imposed on those with high incomes, corporations, or everybody across the board, but without this $733 million tax package many of the educational opportunities and retraining programs that can help us work our way out of this recession simply won't be available. Without these dollars, there won't be anybody to teach the classes, or adequate support staff to keep the schools operating at a level that can accommodate all of those students who are trying to prepare for a degree, or to enter the workforce, or are seeking retraining in a new and difficult economy.
It is easy to make a superficial argument that increasing taxes will hurt the economy. But in this case, at least when it comes to the operation of schools, the opposite is true. Without these tax dollars many fewer Oregonians will have the opportunity to achieve their goals and dreams, because the resources will not be available to support those goals and dreams. Our future economy depends on our ability to adapt to a changing social and economic landscape, and that ability to adapt requires the avilability of educational resources.
Without this tax package, it will be our future that suffers, both economically, and socially.
Thank you for the opportunity to voice my concerns.
K.D. Cline - Milwaukie, Oregon