By Terry Olson of Portland, Oregon - a retired teacher, public education advocate, and former candidate for school board in Portland.
Why do Democrats feel the need to tiptoe around the issue of raising taxes? More specifically, why does Ben Cannon think it necessary to say that we can provide adequate school funding without raising taxes? Or repealing Measure 5?
I'm no economist. I'm not a tax accountant. But I do understand numbers. And here are some facts and figures to keep in mind in the ongoing discussion about dealing with Oregon's fiscal crisis:
- Oregon has a revenue problem, not a spending problem. The state general fund, adjusted for inflation, is smaller now than it was in the 1999 - 2001 biennium. As a share of per capita income, revenue has dropped .57% since 1999 and is projected to fall further in the next biennium.
- Oregon, like most states, has a regressive tax system. The poorest fifth of the population pay a greater percentage of their incomes in taxes than the wealthiest Oregonians.
- Businesses pay a significantly smaller share of the overall tax burden since the passage of Measure 5 in 1990. According to the Oregon Center for Public Policy, the effective tax rate for Oregon businesses declined by more than a third in the 1990's. In fact, Oregon has one of the lowest business taxes in the nation, while neighboring Washington has one of the highest. That apparently hasn't stymied economic growth in the land of Boeing and Microsoft.
- Corporate taxes account for only about 4% of general fund revenues.
- The wealthiest one percent of taxpayers have benefited immensely from the Bush tax cuts. The average tax savings to those at the top is $50,000.
I say it's time to revamp Oregon's tax code. It's time to restore some progressivity to the code by raising taxes on wealthy individuals, businesses, and corporations. Here is what I propose:
- Raise the income tax rates on top earners. Individuals making $100,000 should pay an additional 1%. Those making $500,000 should kick in another couple of points, and so on up the income scale.
- Raise corporate tax rates. And require all corporations to pay a minimum tax ranging, say, from $500 to $10,000 depending on size and volume of sales. (Progressivity should apply to businesses as well as individuals.)
- Repeal Measure 5. The property tax limitation is primarily responsible for the school funding crisis. And it has exacerbated the inequity and the regressiveness of the property tax. (See the 2002 City Club report on tax reform in Oregon.)
I'm not alone in calling for higher taxes. Former Governor Barbara Roberts said on the Thom Hartmann radio show that we need to throw out our unfair tax code and start over again from scratch. Nobel Prize-winning economist Joseph Stiglitz said in defense of Measure 30 that "the tax increase will actually benefit Oregon's economy." And Steve Novick demonstrated in a recent Oregonian op-ed piece that taxes, whether high or low, have no effect on a state's per capita income or on unemployment.
So come on, Dems. Remember your progressive roots. Grow a spine and do what's right for the public programs that you and a vast majority of your fellow citizens so highly cherish.