66 and 67: Partial cure for revenue blues
Wednesday, January 13, 2010
Many of Oregon’s public services, including education, health care, and public safety, are already dangerously under-funded, and in light of the current economy, are running the risk of suffering even more budget cuts. So in response, the Oregon Legislature’s House Revenue Committee introduced Measures 66 and 67. What are these measures, and what do they mean for us?
Rep. Phil Barnhart, who chaired the Revenue Committee, says that Oregon’s tax system is unfair. According to him, low-income Oregonians have to pull most of the state’s weight. People who fall in the low-income bracket pay an average of 8.7 percent, middle-income bracket 7.9 percent, and the high-income bracket only pay 6.1 percent.
Barnhart also states that while the high-income bracket starts at $410,000, the average person in that bracket makes over $1 million annually. Measure 66 aims to increase the taxes for people in that upper bracket. However, even with the increase, they will still pay a smaller percentage than either of the other two groups.
The measure also temporarily reduces the taxes on people collecting unemployment benefits, in an effort to help those who are out of work. Barnhart says that 97.5 percent of Oregonians will not be affected by the new taxes. You only need to worry about them if you are single and make at least $125,000 or are married and make $250,000 between the two of you. What’s more, it isn’t a huge increase in taxes for all of your income. It is an additional 1.8 percent, but only on the money that exceeds that $125,000 benchmark. Barnhart would also like to point out that this jump is not permanent. In 2012, the tax increase will drop again, this time to 0.9 percent. Measure 66 is designed to give Oregon a quick boost, like an economic defibrillator, and then just provide a little more in the future.
Measure 67 is aimed at corporate taxes. As it stands, corporations in Oregon only have to pay $10 annually towards schools, health care, transportation, public safety and other vital institutions. This has been the required amount since 1931. Measure 67 will increase the minimum to $150 annually.
Barnhart says that while this sounds like a huge jump, it will still be the second lowest corporate minimum tax in the country. He also says that it was mathematically formulated to account for inflation, and that $150 today has the same purchasing power as $10 in 1931, so it isn’t really much of an increase.
A recent study by the Oregon Center for Public Policy showed that there are currently 31 corporations in Oregon that made over $1 million annually, but only paid $10 in taxes. That’s less than a “standard” family on minimum wage has to pay. What’s more, 63% of all corporations in Oregon only paid $10. Much like Measure 66, 67 is also designed to be a bit of a jump-start. The taxes will decrease over the next few years, resulting in an only slightly increased tax after 2012.
It’s an unfortunate fact of life: the government needs taxes to function. Nobody likes to pay taxes, but everybody does it. Oregon needs more income for the state, and in my opinion, taxing the richer people is not a bad way to do it. Most of us will not be affected negatively, but we will all benefit from the positives. Not to sound rude, but it is ridiculous that the richer members of society have to contribute less than the rest of us do. I’m sorry they would have to pay more, but the fact is, they have more to pay with. I support Measure 66.
Measure 67 I am admittedly a little iffy about. It is ludicrous that people who make so much money have to pay so little, so I definitely agree that large corporations need to pull their own weight instead of just using, abusing, and exploiting the middle and lower class. However, I have been unable to find good information about how this measure will affect smaller companies and more family-sized businesses. Also, neither side seems to be keen on giving a good explanation. Opponents proclaim that it will kill jobs and destroy Oregon, while Barnhart said, “The nonsense you’re hearing about how this is going to cost jobs is simply not true.” Yet neither side really offered any evidence that I could find. I feel like both sides are trying to pull the wool over our eyes and conceal something they don’t like, but whatever it is, they obviously aren’t telling.
In the end, ignore the sensationalist slogans, and read more about the bills yourself, preferably from a more neutral source. I have seen signs that say “Save Oregon’s small businesses and vote yes on 66 and 67,” and then ten feet away a sign that is identical except it says “vote no,” both plastered across the windows of local shops. As voting day draws near, we find ourselves standing at an unfortunate, difficult, and increasingly misleading crossroads.
Supporters of these measures seem to conjure images of an Oregon devoid of public services, a statewide ghetto, while opponents paint a picture of a state abandoned by industry fleeing the higher taxes, leaving us nothing but bones to pick over. Neither image is good, and I hope that both sides are wrong.
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