Where does tax money go? (Hint: Not in a secret underground vault.)

Kari Chisholm FacebookTwitterWebsite

Dragon-treasure

On Carla's post yesterday about the so-called "job-killing taxes", a commenter (Bob Wiggins) marched out a tried-and-true line to attack the measures.

Whether or not this particular business will be hurt seems less important than the fact that these tax measures together will suck $733 million out of Oregon's private economy, and that will hurt employment in the state.

Let's be absolutely clear about this: Every single dollar that the state "sucks out" of the private economy will be pumped right back into the private economy.

Every single dollar the state receives will be spent on something. Much of it will be spent on payroll - salaries and benefits paid to public employees for the work they do serving Oregonians.

Those public employees (cops, teachers, nurses, judges, and yes, bureaucrats of various sorts) will then go home and spend it in the private economy - groceries, cars, mortgages, running shoes, computers, ski jackets, etc.

The sums that the state doesn't spend on payroll will be spent with private companies that provide materials or services - thus going directly into the private economy. Those companies will spend that money on their own payrolls and on yet other companies that provide them with materials and services - and so on, and so on.

The private individuals and companies that receive those dollars from the state will pay taxes on some of that income - sending the money back to the state, which then will pump it right back into the private economy again; and the cycle continues.

The suggestion that these tax increases somehow remove money from the private economy is a convenient fiction - they might as well be arguing that the state is hording tax money in a giant lair somewhere underground, guarded by a medieval dragon!

Every single dollar "sucked out" of the private economy will go right back into the private economy - and produce good things along the way: educated kids, safer streets, functioning courts, health care and treatment, etc.

  • Lord Beaverbrook (unverified)
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    Every single dollar the state receives will be spent on something.

    And that's where we have to leave it. You have never shown any willingness to discuss the use of out of state contractors, working at 5x the rate the locals do, fraud, mismanagement, etc. This is why people are left with a take it or leave it decision.

    I vote my conscience. Better hope most do, because most people, when left with that choice, will vote against whoever left them in that position.

    This is a great measure. Your arguments are valid. Unfortunately you cannot sway undecideds because you will not engage the debate in terms they are interested in. Your "control the message" philosophy doesn't mean you control the voters. Far from it, as you will see in January. I would dearly love to be proved wrong. Unfortunately, I won't. Might stop back to see the post mortem, and how you still won't be considering this point of view, even after losing.

    This thread is a great example. Are you speaking to progressives, or dittoheads? Yeah, I know, but who raised the point? As I said on Carla's post, you don't change undecideds as well by arguing with dittoheads as you do by discussing it with progressives. Most Americans are conservative, but have an inner progressive. But, given this administration's dismal, and worsening record as a progressive one, you'd rather not bring that up. Easier to argue with those walking straw men, the golems of talk radio. That is what they want. That is why you will lose these measures. That's not going to inspire progressives to continue to waste time on the blog.

    But, you go right on with your little presentation. It's what you do, regardless of the outcome. That's where we part company. Outcome is rather important to progressives.

  • Geoffrey Ludt (unverified)
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    I'm voting my wallet ... no on 66 & 67.

  • Julie F (unverified)
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    Let's hope that everyone votes with their wallet, Geoffrey, because if they do, then 66 will pass by a landslide.

  • Ralph (unverified)
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    Every single dollar the state receives will be spent on something. Most of it will be spent on payroll - salaries and benefits paid to state workers for the work they do serving Oregonians.

    "something" & "salaries and benefits paid to state workers" = NO on 66 & 67.

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    Mr. Ludt: If you vote with your wallet--you'd better vote FOR M66 and M67. It's a big injection of money into the economy--and without it, a whole lot more people will be laid off.

    Perhaps you could explain to us how, if at all, your tax bill will change based on these Measures?

  • Geoffrey Ludt (unverified)
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    @Julie -- you're wrong.

    @Carla -- I'll lose $300. My family will lose $600.

  • Richard (unverified)
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    I'm glad you've finally come along to admitting the obvious. These tax increase, like many before them, are so public employees can keep getting the salaries and benefits they got from their unions paying off Democrat politicians. With this tax increase the union membership can buy their somethings and the union gets their union dues cut to then turn around and reward, once again, the lefty Democrats.

    What a lovely circle of life.

  • Unrepentant Liberal (unverified)
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    Like I always say, if you don't like to pay taxes then Texas will be heaven on earth for you. Just go to Oklahoma and turn hard right. You can't miss it. Bye bye.

  • Geoffrey Ludt (unverified)
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    @Carla -- according to our accountant.

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    Posted by: Geoffrey Ludt | Dec 2, 2009 11:09:41 AM

    @Carla -- I'll lose $300. My family will lose $600.

    @Carla -- according to our accountant.

    You have enough money to have your own accountant and you're worried about $600?

  • JC (unverified)
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    From following Mr. Wiggins comments throughout this campaign, he clearly seems to be suggesting that too many resources in Oregon are going into the public sector and that Oregon is somehow living beyond our means. He may be interested in a recent report published in Forbes magazine (surely a publication any good capitalist would read) that looked at this very subject.

    The report titled "America's Most Beastly Tax Burdens" looked specifically at which states have too many "consumers" of tax revenue and too few private sector jobs to pay the bill.

    Interestingly enough, they actually looked at the number of public sector employees and Medicaid recipients vs. the number of private sector jobs and came up with a ranking of states. According to Forbes Magazine, Oregon fares very well in this objective analysis by a well respected, widely read business publication. Oregon ranked much better than all of our neighboring states (WA, CA, and Idaho). Check out the link here -

    http://www.forbes.com/2009/11/11/taxes-employment-government-business-beltway-tax-burdens.html

    It is really too bad that so many pro business types are spending so much time trashing Oregon's business climate. Oregon is a great place to own and operate a business and most objective reports and analysis show this. Many Oregon businesses both large and small in many different industries, do business with the state directly or indirectly. These business and their employees will be hard hit by massive reductions in state and federal funds, be it for health care, construction, education, etc.

  • Geoffrey Ludt (unverified)
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    Nick ... an accountant is not costly ... it's all relative though I guess.

    And yes, I do worry about $600 -- that's almost a months worth of groceries for my family.

  • Tyrone (unverified)
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    I think we need Oregonian reporter Jeff Mapes to investigate Mr. Ludt. We need to determine how many vacations he and his family have taken, where they were taken and how much they cost. I'd also like to see other data, like what types of vehicles are driven (probably SUV's that contribute to Global Warming).

  • Julie F (unverified)
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    Geoffery, let's think about how many people fall into each of the following categories:

    People Whose Wallets Will be Negatively Affected by 66 People in households making more than $250k Individuals who make more than $125k

    People Whose Wallets Will Not be Affected by 66 People below the income thresholds who are not employed by the state

    <u>People Whose Wallets Will Be Positively Affected by 66 People employed by the state People who started receiving unemployment benefits in 2009

    I believe that the estimate for how many fall into the first category is 2.5% of taxpayers. The last category is estimated to include 270,000 people receiving a tax cut due to their unemployment benefits (here's a hint, that's more than 2.5% of taxpayers). Add in the state workers, and you get significantly more people with bigger wallets than smaller wallets.

    And, if we take your "voting with your wallet" to mean "voting solely based on self-interest", then the people whose wallets are not affected would vote for 66 because they want better funding for their schools, police departments, etc.

  • ThinkOregon (unverified)
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    You can decide for yourself if Oregonians should demand a tighter rein on government spending - or - continue to support double digit budget increases. Oregon's Legislatively Adopted Budgets have grown 64.2 percent between the 2001-03 and 2009-11 biennia, while the state's population has grown only 10.8 percent between 2001 and 2008.

    Charts here

  • Gerry (unverified)
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    ThinkOregon - thanks for the link. Nice website.

    I am so sick and tired of hearing the class-warfare arguments for raising taxes - and the investigations directed at those who speak out. (where they vacation,etc.)

    The bottom line is our government has grown 64% which outstrips any raise or income boost regular people see. And there's no end in sight and it's not sustainable. Every election cycle, it's the same story -we're out of money, who can we tax...?

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    I want to note that I made a minor edit to the post above. Originally, I had "state workers" in the text. I was reminded by a friend that much of the spending goes to public employees that aren't on the state payroll, but rather on school district payrolls. So, I changed it to "public employees".

    As far as my argument goes, that's a distinction without a difference - but in the interest of accuracy, I've made the edit.

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    Ludt, you mentioned a family. Do you have kids in school?

    How much would you spend to ensure that they go to school from mid-May to mid-June?

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    Nick ... an accountant is not costly ... it's all relative though I guess.

    And yes, I do worry about $600 -- that's almost a months worth of groceries for my family.

    I see, Mr. Ludt.

    So how much is it worth it to you to pay for fire, police, prisons, roads, schools and services for the elderly in this state?

    I suspect that's at least as much in your self interest (your words) as the $600 and the bill from the accountant.

  • Tom Vail (unverified)
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    Where do taxes go? They should go to pay for government provided services, period. Where do profits go? They go to reward risk takers and they go to reinvest in further business activities. And quite a bit goes to feed government.

    When there are more taxes and fewer profits, we get more government and less business activity. Government does not grow our corn. It does not mine our coal or cut our timber. It does not create wealth. It provides services that assist us in working together to provide for our own food, shelter and security.

    We need both profit creating activities and government activities. However, I fail to see a happy ending where government activity continues to grow at a rate far faster than profit making activity. At some point, the growth of government must be constrained. Only if business activity is profitable are the dollars created to fund the government activities.

    Letting our Legislature off the hook for overspending by giving more tax money will just get us more of the same. We, the people, are at fault for asking for or accepting too many "gifts" from our government. We are also responsible for electing people who are more than willing to spend other people's money with less frugality than they spend their own.

    We need to draw the line and ask our government to live within its means.

  • Robert Collins (unverified)
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    Kari, You are correct in the short term but incorrect in the long term.

    Yes, public employees spend their money buying things in the local economy. But the money they are being paid comes from the local economy. Government creates no wealth. They can't put back as much as they pump out. It's a downward spiral.

    Also, lacking from this entire debate is PERS. Every two years state government says they are being cut when in fact they are not getting as large of an increase as they would like. They have to have more money every cycle not because of the cost of services, but because of the increasing burden of PERS. Without true reform of that system, there's no way to ever catch up... no matter how much people are taxed.

  • Bob Wiggins (unverified)
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    Kari, thanks for the shout out. I guess someone is reading what I've been writing. And for what it's worth, I am not against public employees. My wife and sister are public employees. My mother was one too.

    Your position is that the state will not salt the tax hike revenue in a lock-box; the state will spend the money, primarily on public employees' (and retirees')salaries and benefits. And those people will spend the money they get.

    The people who had the $733 million, however, would not have salted the money away in lock-boxes either. They would have spent the money on themselves and their families or invested it in their businesses. But if the state takes it, they don't get to do that anymore and they'll make changes to their future behavior accordingly.

    The economists who are opposed to the tax hikes assert that the tax hikes will have a dramatic, negative impact on employment in the state over the medium term. (See http://www.cascadepolicy.org/2009/06/23/raising-oregon%e2%80%99s-corporate-income-tax-rate-will-cost-43000-oregon-jobs/ and http://www.cascadepolicy.org/2009/06/11/taxing-the-%e2%80%9cwealthy%e2%80%9d-more-will-cost-36000-oregon-jobsby-bill-conerly/) In a (grossly oversimplified) nutshell, the argument is that the tax rate increases will reduce the rewards of investing in Oregon relative to other places, and people will adjust their behavior accordingly. The impact of that will be reduced employment in the state. Everyone is free to read their analyses and decide for themselves.

    The economists who support Defend Oregon did not address the medium-to-long-term affects of the tax increases; they focused only on the short-term. (http://www.ocpp.org/2009/20091007LetterFromEconomistsFnl.pdf) They asserted that the state spending resulting from the tax hikes will in the short-run offset the loss in demand because the state will definitely spend all the money and will spend most of it in the state. The Legislative Revenue Office analysis, however, asserts that in the medium term, the impact of the tax hikes on employment will be negative, though not as negative as Conerly and Pozdena assert. (See http://www.ocpp.org/2009/20090930LROReport.pdf, table 17).

    As I said, everyone is obviously free to review the analyses and think about it for themselves. My experience tells me that these proposed tax hikes are bad for our state.

    Bob Wiggins

  • ThinkOregon (unverified)
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    Both sides of this embattled issue include honorable men and women who believe deeply that their position is in the best interest of Oregonians. As passionate advocates, they quote economists and cite statistic that support their respective points of view. Both sides give dire predictions should voters disagree with them in January. But rather than clarifying matters, voters are often left to untangle a hairball of seemingly unending contradictions for themselves. With this in mind, ThinkOregon has decided to focus on four Guiding Principles - centered around economic recovery - that should help you examine issues at hand and make an informed decision.

    1. Put Oregonians First

    In a recent article in the Oregonian, Mike Francis wondered aloud "Is anybody surprised by the holiday spending decline?" Mike walks us through the gut-wrenching impact of the recession on those most vulnerable in the state: increased school-aged poverty; increased reliance on food stamps; the likelihood of another wave of residential foreclosures; and, a Misery Index that reflects the bleak employment outlook for job seekers in Oregon.

    At the root of this distress is the lack of full-time, living wage jobs in Oregon. As reported in the Salem's Statesman-Journal, data from the U.S. Bureau of Labor Statistics shows the true measure of Oregon's joblessness is over 20 percent.

    Beneath the grim statistics is the real crux of Oregon's dilemma: the interdependent relationship between employment and the State. The acute shortage of full-time jobs in Oregon is well documented... but equally acute is the necessity for the state to return to full-employment. The simple truth is that Oregonians who are employed full-time at living wage jobs are happier, more self-reliant and less dependent on state services. Likewise, a fully-employed labor force provides the State of Oregon with more tax inflows and relieves the burden on state agencies.

    Summary: Creating new jobs for Oregonians and returning the state to full-employment must be our collective, primary focus for the foreseeable future.

    1. Create A Sustainable Economy

    As Oregon charts its way forward, Measures 66 and 67 provide an unfortunate but necessary backdrop to the ongoing public debate that will ultimately decide how best to create a robust, vibrant local economy while pursuing the region's environmentally-conscience agenda.

    We believe that Oregonians will need to adopt economically sustainable practices on the scope and scale afforded the environment. This means creating a supportive business climate in which employers are able to create new, living-wage jobs. On the other side of that same ledger, Oregonians must demand state and local officials conserve limited fiscal resources in order to stem the unfettered growth of government.

    Summary: We recommend that local governments place economic sustainability on par with environmental sustainability while engaging in sound economic stewardship with finite taxpayer resources.

    1. View Employment as a Fragile Ecosystem

    The purpose of Measures 66 and 67 is to collect $733,000,000 in additional taxes from employers and individuals. Those dollars will flow out of Oregon employers into a state bureaucracy that has grown by over 64% since 2001. And for employers large and small - each of whom are faced with the most severe economic downturn since the Great Depression - every dollar counts.

    As Intel spokesman Bill MacKenzie said in a recent Oregonian article, "whatever extra dollar we have to pay isn't peanuts. It's a dollar that we have to compensate for in other ways." Translation: if the State of Oregon levies new taxes on Oregon employers, those employers will be forced to a) pass along the costs to consumers; or, b) cut jobs.

    Striking a more cautious tone, we believe the employment situation is so fragile in Oregon that voters must not risk doing it any further harm. Even in the face of state budget cuts - and any potential pain it may cause Oregonians - we believe that the need to create full-time, living wage jobs for Oregonians outweighs all other considerations.

    Summary: We recommend viewing employers/employment as a precious resource within a fragile ecosystem that should be nurtured just as we would the environment.

    1. Channel Anger, Take Action

    It's easy to get riled-up over the trillions spent on Wall Street bailouts... especially when we see a return to record bonuses for those same corporate executives who help create this economic crisis. Equally upsetting is main street's mounting job losses and the continuing slide of the middle-class' household net worth.

    So while our collective anger may indeed be justified, we need to take a deep breath and recognize that "taxing corporations" is synonymous with "increasing costs on local employers."

    Summary: We recommend that Oregonians redirect their outrage on two important fronts. A) become unflinching in our determination to create the conditions that will help employers put Oregonians back to work; and, B) work tirelessly to support those most in need through local charities and civic organizations.

    Recommendation

    Measure 66 and 67 actually represents an important inflection point for the future of Oregon. We have a unique opportunity to use this challenge to become just as energized and engaged about local economic issues as we are about the environment. In our opinion:

    A vote "yes" is likely to amplifying the already vicious downward economic spiral that is hurting so many Oregonians.

    A vote "no" will likely stem the misery; help put Oregonians back to work; create a more sustainable economy; and, enhance the State's ability to deliver social services.

    Click here to read the entire post

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    Think Oregon,

    I looked at your chart and I think it tells a very different story than you submit. As I understand it, and please anyone correct me if I mistate the facts, the general fund plus the lottery is what the legislature gets to allocate and where all noise is. It is this sum that will face the cut. The non-federal spending included in your total includes tuition at colleges, fees at state parks, and gas taxes for roads. In essence they are user taxes with the benefits going to those who pay them. The federal taxes and spending gets determined in Washington.

    On the chart you listed the general plus lottery funds go from $12 million in 2001/3 to $14.3 million in 2009/11. This is an increase of 19% over the period. The population will have grown more than 10.8% and inflation is more than 22% over the same time period. This implies that the actual real dollar spending per capita for the spending in question (education, justice system, health care/human services) has declined in this period.

  • Geoffrey Ludt (unverified)
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    Chisolm--

    4 kids ... homeschooled.

    Carla--

    Fire, police, etc ... wish this massive increase in spending were limited to the kinds of services we all agree on but, unfortunately, I see that the "Yes on 66 & 67" campaign is also backed by ACORN Oregon, an organization that has been "allegedly" exposed supporting prostitution and child sex trafficking.

    Cheers!

  • ThinkOregon (unverified)
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    John C. Thanks for taking time to read the post and your thoughtful reply. Unfortunately, if I understand your response, you're making what some economists refer to as the "colors of money" argument... which is obviously a point of contention for you.

    Economic International discusses that issue here:

    http://www.econinternational.com/blog/2009/11/17/oregon’s-in-recession-but-the-state-budget-is-booming/

    We believe, therefore, our position is intellectually honest and in the best interest of Oregon's concerned about the economy and job growth.

    All that said, I thank you again for a reasoned response.

  • Ms Mel Harmon (unverified)
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    And Ludt goes over the cliff......next?

    I swear, trying to link ACORN to every damn thing should be the new Godwin.

  • Jim (unverified)
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    ThinkOregon,

    A vote "no" will likely stem the misery; help put Oregonians back to work; create a more sustainable economy; and, enhance the State's ability to deliver social services. This is quite a claim. Can you point us to those "social services" that the State will be "enhanced" to deliver by a No vote on 66-67? Food, health, health insurance, housing, job training,... - are these the ones? Which specific programs?

  • Geoffrey Ludt (unverified)
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    @ Ms Mel ...

    I didn't make the linkage ... Yes on 66 & 67 & ACORN did:

    http://voteyesfororegon.org/who-we-are.html

    Down at the very bottom of the "Who We Are" page.

    I could have also pointed out that the measures are supported by SEIU ... members of which brutally beat a black man in an obviously racially motivated event:

    http://video.google.com/videosearch?rlz=1C1CHMB_enUS337US337&sourceid=chrome&q=seiu%20beating&um=1&ie=UTF-8&sa=N&hl=en&tab=wv#rlz=1C1CHMB_enUS337US337&sourceid=chrome&q=seiu+beating&um=1&ie=UTF-8&sa=N&hl=en&tab=wv&qvid=seiu+beating&vid=8550751656629955771

  • Andy (unverified)
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    I'll be voting no on both measures. I don't see any reason to send any more money to Salem. Sending them additional tax money is just enabling their bad habits and lack of control.

    These measures are also poor public policy. The pitch is that the taxes are needed to support services for the middle class but only the rich will pay. There is something obviously wrong with that sort of policy. If the services are truely needed by all Oregonians then all Oregonians should be willing to pay. Anytime people try to get something for nothing by forcing others to pay for their goods then you know that the process is being run by cheats. I guess I'm not totally surprised to see that the so called progressives are nothing more than cheats but I guess that is what it has come to. People who won't pay for the extra services that they want but are willing to lobby that someone else pays. Worthless cheats in my book.

  • Peri Brown (unverified)
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    Posted by: Geoffrey Ludt | Dec 2, 2009 1:32:37 PM

    Chisolm--

    4 kids ... homeschooled.

    Carla--

    He's a Ludtite. They're against all progress.

    I'll let you get back to arguing with the dittoheads. I guess you have a cunning plan how arguing with extreme right wingers is going to sway the middle of the road. Guess you must think they represent more than the extreme right wing.

    To bad there wasn't a similar two month effort to petition the leg when they decided to punt this to the voters.

    Another six weeks of this. Still, it does give an excuse to not cover how the Dem Congress is failing on health care and how the Administration is failing on Afghanistan.

    (Hint: Not in a secret underground vault.)

    Yeah, we know the state has no concept of savings.

  • Ms Mel Harmon (unverified)
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    Ludt,

    Yeson66/67 said that ACORN supports prostitution and child sex trafficking?

    Two questions: 1. What drugs are you on? 2. Why aren't you sharing?

  • Geoffrey Ludt (unverified)
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    @Peri

    Anything next to the progressive orthodoxy is the extreme right wing.

    just sayin.

  • ThinkOregon (unverified)
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    Hi Jim,

    Your question goes directly to our primary thesis: if M66/67 passes, it will take nearly a billion dollars from employers in an labor market with a Misery Index pegged above 20% (U-6 as measured by the BLS). We believe that this will not only crush the potential for jobs growth, it will further damage the state's tax base by driving unemployment up and tax rolls down.

    It goes directly to our first principle, that stated simplistically, the state will be able to provide more services if it focused first on returning Oregon to full-employment:

    Quoting:

    "...At the root of this distress is the lack of full-time, living wage jobs in Oregon. As reported in the Salem's Statesman-Journal, data from the U.S. Bureau of Labor Statistics shows the true measure of Oregon's joblessness is over 20 percent.

    Beneath the grim statistics is the real crux of Oregon's dilemma: the interdependent relationship between employment and the State. The acute shortage of full-time jobs in Oregon is well documented... but equally acute is the necessity for the state to return to full-employment. The simple truth is that Oregonians who are employed full-time at living wage jobs are happier, more self-reliant and less dependent on state services. Likewise, a fully-employed labor force provides the State of Oregon with more tax inflows and relieves the burden on state agencies.

    Summary: Creating new jobs for Oregonians and returning the state to full-employment must be our collective, primary focus for the foreseeable future."

    End quote

  • Geoffrey Ludt (unverified)
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    @ Ms Mel ...

    Where have you been? Under what rock? Watch and learn ... ACORN supports prostitution and child sex trafficking and, supports 66 & 67:

    http://www.youtube.com/watch?v=cWRTYD26Kxc&feature=player_embedded

    http://www.youtube.com/watch?v=cgqORp48uik&feature=player_embedded

    I can go on ... there's at least 5 of these examples from across the country.

  • LT (unverified)
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    "I'll be voting no on both measures. I don't see any reason to send any more money to Salem. Sending them additional tax money is just enabling their bad habits and lack of control."

    Bad habits? Like funding state police, education, aid to needy families?

    "Lack of control"? Once upon a time in a previous recession, there was a Republican St. Sen. chairing the Human Services subcommittee of Ways and Means. This legislator was being told by the "cut it all" crowd not to fund anything--just cut all spending.

    In what many saw as more candid than most legislators are capable of, this legislator told a town hall meeting,

    "There are some programs for the neediest Oregonians which I will not allow to leave my subcommittee. They can remove me as chair but as long as I am chair those cuts for the neediest Oregonians will not leave my subcommittee".

    You may think that is "lack of control" but even people who did not vote for that legislator admired that stand for what she believed in.

    Andy, if you don't like that attitude, find legislative candidates who agree with you.

    But " If the services are truely needed by all Oregonians then all Oregonians should be willing to pay" means if people lose their jobs, tough luck, they can be homeless and starve for all you care. Somehow I don't think that would be a winning slogan.

  • Bill Bodden (unverified)
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    "Where does tax money go?"

    We would do well to apply that question to where social security tax deductions went. I understand a portion was embezzled to go into the general fund to be dispersed by Congress on other projects. Now, we are learning that Medicare and social security will run out of money. How about refunding that social security money to the social security administration?

    And talking of a government agency running out of money, that will happen to the war department on September 30, 2010. Same as at the end of every fiscal year.

  • Jiang Lee (unverified)
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    Where have you been? Under what rock? Watch and learn ... ACORN supports prostitution and child sex trafficking and, supports 66 & 67

    and, and, and Charles Manson is strongly in favor of dental hygiene, and voted for McGovern!

    I'm never brushing my teeth again!

  • Steve Marx (unverified)
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    You have some flawed thinking going on. “Every single dollar that the state "sucks out" of the private economy will be pumped right back into the private economy.” Well, y’know, every 100% of single dollar you leave in the private economy will be spent on something. In addition, it will be directly spent on something without a skimming off the top. For example, for the extra 20% that Teddy threw into education in the happier 2007-2009 biennium, by his own admission most of it went for benefits and very little to improve the classroom experience. Pretty much the same can be said for the $1B in stimulus money this year and the $600M or so of tobacco settlement (I’d wager <5% of that actually went to help cancer patients.) So I really have no reason to believe the results will be any different with more money sent to Salem.
    We really need to think of a new paradigm besides “feed the beast.” Perhaps something along the lines of doing more with less (I think Teddy mentioned that for effect in one of his campaign speeches) and we should demand more from our “leaders”. Either way, before they get any more tax monies willingly, it would behoove those forces pushing these tax increases to show what they have done to reduce (heck, even control) expenses. Especially when you realize that state revenues over the past 15-20 years have gone up at a much faster pace than population times inflation.

    “How much would you spend to ensure that they go to school from mid-May to mid-June?” If it would help reduce the flaws in reasoning and sentence structure like above, I might chip in some. - Only if we actually got more than a one month school year.

  • jim (unverified)
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    Thanks T.O. for confirming this.

    And thanks for explaining in simple terms your "thesis" and "belief" about how Oregon's tax receipts will increase if Oregon doesn't raise taxes, including raising the minimum tax from $10 to $150. That was very helpful - and it confirms my supposition that, indeed, your 'belief' was the actual source of more social services - as opposed to the tax dollars that would be collected under M 66-67..

  • Geoffrey Ludt (unverified)
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    @jiang -- huh? Hello apple? this is Orange ...

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    ACORN Oregon, an organization that has been "allegedly" exposed supporting prostitution and child sex trafficking

    Do you have a source for that claim? Have any of these things you're talking about happened in Oregon? Was the Oregon chapter (which I never even knew existed until you mentioned it) involved in any way?

  • RyanLeo (unverified)
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    They are trotting out Public Safety and Kids just like agribusiness trots out FarmAid.

    As for M66 only affecting those making $250k or more, that is just blatantly false. Here is the text of the measure straight from the Oregon SOS website:

    http://www.sos.state.or.us/elections/irr/2010/301text.pdf

    If you read that the if you file taxes, yet make under $2,000/year in taxable income, then M66 will tax 5% of your income.

    Like I said, patently false when the usual tout that it only affects the rich; M66 affects everyone.

  • RyanLeo (unverified)
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    Here is a good site on both measures that cites it's sources. Here is M66 and it's blatantly misleading title, which you realize when you read the text of the referendum:

    http://ballotpedia.org/wiki/index.php/Oregon_Measure_66_%282010%29

  • LT (unverified)
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    According to the 2008 tax tables, the standard deduction is $1865. So a person who had a temp job which paid them roughly $2000 would have very little taxable income.

    Under the 2008 tax tables (which we used to do our taxes earlier this year) by my calculations the tax on $2000 according to those tables is 5.15% --so that comment "If you read that the if you file taxes, yet make under $2,000/year in taxable income, then M66 will tax 5% of your income." doesn't really mean much.

  • RyanLeo (unverified)
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    LT,

    You are correct, but the point is many other regular commentators on this blog have been blatantly trotting out that it is a tax on ONLY those making $250k or more. Yet, you are complicit in not calling them out for lying.

    If you read the measure, M66 increases taxes on everyone, not just individuals making $125,000 and/or families/individuals making $250,000/year.

    Furthermore, these measures like the budget failure in California are propping up a broke PERS system. M66 and M67 are needed because current services cannot be funded at current levels with the current number of retirees drawing from PERS. Likewise, more ballot measures like M66 and M67 will be needed in the future as the Baby Boomers retire en masse. Whether they succeed or fail because of a tax payer revolt that I will be partaking in is the question.

    This is the story that is not being told, but it is understood if you take a holistic view of the Public Sector.

  • alcatross (unverified)
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    Bill Bodden commented: 'We would do well to apply that question to where social security tax deductions went. I understand a portion was embezzled to go into the general fund to be dispersed by Congress on other projects. Now, we are learning that Medicare and social security will run out of money. How about refunding that social security money to the social security administration?'

    Nothing has been 'embezzled'... This is a common misconception about the Social Security 'Trust Fund' - which in reality is just a couple of accounting entries... any 'money' in the 'trust fund' is converted into special-issue Treasury bonds. The money does not belong to the Social Security Administration.

    Currently, the Social Security system is running a surplus, taking in more in taxes than it spends on benefits. That surplus is used to purchase government bonds -- the only purpose to which it can be put. The purchase of those bonds generates general revenue for the federal government and that money is spent on the operations of the federal government. That is a bad system, but it is how the trust fund was designed to work. The fund does not hold cash, never has held cash, and was not designed to hold cash.

    Bill Bodden commented: 'And talking of a government agency running out of money, that will happen to the war department on September 30, 2010.'

    Just like all the other agencies funded by the remaining 75 to 80% of the federal budget (Medicare, Medicaid, Social Security, and other mandatory entitlement spending, non-defense discretionary spending, interest on debt, etc...)

  • Julie F (unverified)
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    RyanLeo - I'd like to try to keep the conversation civil here, but you are being pretty dense... Currently, the tax for individuals making less than $2,000 is 5%. So, in the text of M66, when it says that the tax for people with income <$2,000 is 5%, that means there's no change. Sheesh. The ballotopedia source that you cited completely contradicts your point.

  • RyanLeo (unverified)
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    Not to be redundant, but my theory on why we are in budget crises across the nation is due to the exportation of our skilled labor tax base to India and China under the premise of Free Trade.

    Furthermore, I pray that there are more countries who default on their sovereign debt like Dubai. For too long, Americans have propped up other country's infant economies at the expense of the American worker and the skilled labor tax base that Government has so symbiotically been aligned with. What have we gotten for exporting our tax bases, killing our skilled labor, and the dreams of our children? Cheaper consumer goods maybe?

    It don't matter how cheap consumer goods at Target are if you are working an espresso machine and pulling in $10 to 10/hour when 30 years ago your Dad could support a family of 4 on the income from working in a steel mill on a high school education.

  • LT (unverified)
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    "LT,

    You are correct, but the point is many other regular commentators on this blog have been blatantly trotting out that it is a tax on ONLY those making $250k or more. Yet, you are complicit in not calling them out for lying."

    Ryan, what do you do for a living? Do you really believe that the one and only obligation of anyone who comments on this blog is to ride herd on every comment?

    Not only that, but if the 2008 tax tables had a 5.15% tax rate on $2000 taxable income, and you say "yet make under $2,000/year in taxable income, then M66 will tax 5% of your income." {no, I did not look at every level on the chart, just $2000, because I have other uses for my time}

    that doesn't look like a tax increase to me.

    These are the reasons I am voting yes: 1) I believe the legislature is paid to pass balanced budgets and I wonder how much of the money and organization to put 66 & 67 on the ballot came from inside Oregon.

    2) I see no alternative--and it looks like Deschutes Co. Comm. Luke has punched a hole in "don't worry, you can vote down the taxes and there will be no harm from budget cuts"

    3) As people who have spent a lot of time here know (and as my friends have known for many years) I vote against campaigns if I don't like their tactics.

    The "Tillamook Dairy Farmer" letter sent from a warehouse address on a street off Salem Industrial Drive falls into that 3rd category. They are running a brainless, insulting campaign, and seem to wonder if the truth matters to people.

    Enough already with the arcane details of the tax code. I have known Mark Nelson since the 1970s and Pat McCormick at least since the 1980s. They used to be smarter than this. This is the sort of campaign which gives consultants a bad name.

  • RyanLeo (unverified)
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    LT,

    I work the 10 pm to 6 am shift at a mental health facility for a private, nonprofit who is based in Minnesota, yet has operations in states such as California.

    I am barely making ends meet and I am supporting my Mother who is unemployed and over the age of 50.

    That answer your question?

    Julie F,

    Yes I am being dense and it is a lot more forgivable when public employees comment on blogs and parrot the ballot titles just like their manager tells them to when discussing these issues in public.

    I have been and will be stupid on some matters in the future. However, I will not hide who I am and deliberately lie to the public about something that affects their ability to feed their family in the midst of an economic depression for those living on Mainstreet like myself.

  • RyanLeo (unverified)
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    Than not "when" in my previous post's first sentence. Sorry, I have to drag that editing monkey kicking and screaming out of my closet.

  • (Show?)

    RyanLeo - Which section of M66 increases taxes on individuals earning less than $125k/$250k? I've read and re-read this statute, and I don't see it. Thanks

  • LT (unverified)
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    "I work the 10 pm to 6 am shift at a mental health facility for a private, nonprofit who is based in Minnesota, yet has operations in states such as California. "

    In other words, RyanLeo, you are not registered to vote in Oregon, but are telling us how to vote and that we should bird dog every statement made that you don't agree with?

    I actually know members of Ways and Means, from my state senator who is widely trusted (even by those who never voted for her) as a source of institutional wisdom, the House Co-chair of Ways and Means, and a freshman who served on one of the Ways and Means subcommittees.

    While you talk theory, if the taxes are not upheld, those folks on Ways and Means who already balanced the budget once, are going to have to do it all over again.

    Don't tell me IT IS THEIR JOB or some such. The DID their job. Petitioners with out of state money put the measures on the ballot. Registered Oregon voters will cast ballots in January. The opponents of the taxes are not talking about what they would support if the taxes are not upheld.

    If they can't talk about line item cuts that is not my problem. They deserve to lose because we have seen this movie before.

    I'll bet you don't know (as an out of state resident) how many special sessions we had in 2002, what the result was, and the Ways and Means co-chair from that era later elected to statewide office. All you know is what you read online, but people here in Oregon should follow your wisdom?

    Yeah, right.

  • Neolin (unverified)
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    And RyanLeo, I hope the US defaults on its debt to China. What goes around comes around.

    In case anyone didn't get the memo, BO is now a place where progressive debate only trolls. If you respond, and you're progressive, make sure it's to a troll. No cross-talk between likes.

    Follow the trolls' example. Have you EVER ONCE, seen a troll on here say anything about another troll? Never. That's because the lines they got from Glenn to paste in don't have anything positive.

    That's how you win elections. Say only negative things, and then your opponents have to "call out the lies for the ordinary people that have lives". That really has to be the most condescending statement I've heard in the naughties, Pat Ryan!

    Can no one see the monumental (and calculated) waste of energy your responding to these scum suckers represents? Ignore the trolls. They don't have a social life, so they don't influence voters. They're too lazy to vote themselves. They won't go away (nothing else in life to do) but you'll be doing something worthwhile with your time. Don't fool yourself. This ain't it.

  • RyanLeo (unverified)
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    LT,

    Getting all worked up over nothing. Funny how your last post was basically, "You lived in Oregon for a decade, are now living in California, therefore do NOT tell us how to vote!" Conveniently, a couple paragraphs later you mention "out-of-state" interests providing the funding to get the measures on the ballot.

    How do I interpret this? First, I look back to past elections specifically 2004 where "out-of-state" interests along the ideological lines of Loren Parks were funding Measure 36.

    You along with many others here on BO screamed about "out-of-state" interests when it came to conservative measures. Now you are trying to marginalize "out-of-state" folks who differ on these measures funded by "out-of-state" interests.

    Hypocritical. Typical.

  • RyanLeo (unverified)
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    Neolin,

    I got the memo. I guess honest disagreement is considered "trolling" now. Honest disagreement with the supporters of M66 and M67 is what I have.

    Everyone will be affected because if they pass, then the resulting inflation in non-luxury, consumer goods will rise, while M66 and M67 allow Oregon PERS to continue reaching that close to or over 50% of the Oregon budget.

    These measures ain't helping services, they will help keep services at current levels because PERS is bankrupting and will continue to bankrupt Oregon just like CAL PERS is doing to California.

    I see it for what it is and I don't trot out sacred cows just like Democrats trot out kids, Republicans trot out the troops, and agribusiness trots out FarmAid.

  • Steve Marx (unverified)
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    "many others here on BO screamed about "out-of-state" interests when it came to conservative measures."

    And probably a lot more than screamed about the zillions George Soros throws at Democrat causes. Of course he is very careful to keep that money offshore to avoid paying US Taxes. Of course, there is not $1 from out of state on the YES 66/67 campaign.

    I wouldn't worry about it, when they can't discuss substantive issues or the merits, it usually descends to personal attacks as justification.

  • Richard (unverified)
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    Is BO really advocating trickle down economics?

    Give public employees theirs and it will trickle down to the rest of the taxpayers?

  • Rugby Nick (unverified)
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    Where ever it is going it is not being focussed where it needs to be... stimulating SMALL businesses to provide more real jobs and real money in peoples profits. It gets lost in the profit margins and capital of big business

    Rugby Nick

  • Magnus Greel (unverified)
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    Posted by: Geoffrey Ludt | Dec 2, 2009 7:24:14 PM

    @jiang -- huh? Hello apple? this is Orange ...

    It was a pretty par response to what you wrote. Glad you agree it was incoherent.

  • LT (unverified)
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    "Give public employees theirs and it will trickle down to the rest of the taxpayers? "

    Richard, if you had a store, would you only want customers who worked for private employers?

    Do you think schools and other government entities never buy books, supplies, software, etc. for private businesses?

  • Steve Marx (unverified)
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    "Richard, if you had a store, would you only want customers who worked for private employers?

    Do you think schools and other government entities never buy books, supplies, software, etc. for private businesses?"

    Really, I don't think most business people care who gives them the dollars. However, if we let the private sector keep the dollar, they will spend close to 100% of it. If it goes into the public sector, you will see a lot less of that same dollar come out into the market since it will get siphoned off.

    Again, in 2007 we got a 20% bump in education money and very little went into the classroom. We've gone thru almost a $1B in stimulus money and $600M in tobacco settlement - Poof!

    So let the workers who need to spend money on groceries and clothing for their children and pay their utilities keep it. It will accelerate the flow of money greatly.

  • dartagnan (unverified)
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    "I'll lose $300. My family will lose $600."

    Please, you're breaking my heart.

    Conservatives can never seem to understand that taxes are what we pay for the privilege of living in a civilized society.

  • (Show?)

    Everyone will be affected because if they pass, then the resulting inflation in non-luxury, consumer goods will rise, while M66 and M67 allow Oregon PERS to continue reaching that close to or over 50% of the Oregon budget.

    Could you please cite the economic experts who agree with this assessment? I'm not saying PERS isn't a problem that needs attention--but to hold the rest of the Oregon budget hostage to it seems entirely ludicrous to me.

  • LT (unverified)
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    "However, if we let the private sector keep the dollar, they will spend close to 100% of it."

    And what is your evidence of that?

    I'm all for "prove you have created a job and we will give you a tax credit".

    But I am sick and tired of "if only the taxes are low, businesses will create jobs but don't ask for accountability".

  • dartagnan (unverified)
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    "I see that the "Yes on 66 & 67" campaign is also backed by ACORN Oregon, an organization that has been "allegedly" exposed supporting prostitution and child sex trafficking."

    Nice red herring you dragged in there.

    And why is "allegedly" in quotes?

  • Paul Cox (unverified)
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    I'm as conservative as they come, and I'm voting for it. Why? All those extremely conservative middle management folks that will be pocketing this money. Kari is right!

    You all have been most helpful. Love the bits about "x $ goes to each student...". Very, very helpful to my friends that want yearly pay increases that you haven't split out that a big chunk of every dollar, going to "schools" never gets to the kids.

    It's only fair. Liberals can't be trusted to give middle managment an equivalent career to what they'd have in the private sector. Fortunately those that the top do, and being a Director in the schools system is one very nice job.

    Let's keep it that way. Vote "yes" on M66/67!

  • Friends of the Aggadors (unverified)
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    Posted by: Richard | Dec 2, 2009 11:09:18 AM

    What a lovely circle of life.

    You and Paul remind me that there's nothing beautiful about life. When I feel irrational exuberance coming on, I check in here and read your work.

    I think Paul's circle of life is a little more on the money. Cheer up! He's got a great point.

  • Lord Beaverbrook (unverified)
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    Posted by: dartagnan | Dec 4, 2009 11:39:19 AM

    "I see that the "Yes on 66 & 67" campaign is also backed by ACORN Oregon, an organization that has been "allegedly" exposed supporting prostitution and child sex trafficking."

    Nice red herring you dragged in there.

    And why is "allegedly" in quotes?

    Because he's an idiot. Go to rural LA and you'll see every other word in quotes. eg. "If you need 'one', take 'one'. If you need 'two', get a job!"

    LA. A great place to be from.

  • Paul Cox (unverified)
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    One place the money SHOULD go, is to put the ten commandments in every public building. The Governor of Arkansas is making good progress on this.

  • Steve Marx (unverified)
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    “Conservatives can never seem to understand that taxes are what we pay for the privilege of living in a civilized society.” A lot of people do understand, however, that while ticket price is the cost of admission to a movie, that paying $300 to see 50% of a bad comedy is not such a great deal. Not a great paraphrasing, but I hope you get my drift.

    <hr/>

    “"However, if we let the private sector keep the dollar, they will spend close to 100% of it." And what is your evidence of that?” The fact is that most businesses do not leave buckets of money sitting around, rather they invest it where the best return is. For example, - Investing in plant & eqpt to increase efficiency - Paying dividends to stock holders who will spend it - Being able to fund employee benefits - Hiring people to work who use their paychecks to buy goods My point being that if you give $1 to government, $0.50 may end up back in the economy. Like the 20% extra we budgeted for education in 2007-09 that didn’t do anything for the classroom experience. If you leave that same $1 in the private sector a heck of a lot more of it will end up buying goods and services.

  • LT (unverified)
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    "The fact is that most businesses do not leave buckets of money sitting around, rather they invest it where the best return is."

    The fact is that we've been hearing this rhetoric for many years. But where is the proof?

    How many jobs in Oregon were created after Freedomworks won the Measure 30 election?

    Bush gave businesses all those tax breaks, Clinton balanced the budget. Under which president were more jobs created?

    Theory and suppositions like yours are not proof.

  • Steve Marx (unverified)
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    "How many jobs in Oregon were created" after the 20% bump in education spending in 2007?

    Taxes do NOT create jobs.

    I think tax breaks to create jobs leads to a lot of gaming the system. However, raising taxes keeps potential employers away and at worse case drives out existing employers or stops them from expanding.

    However, thinking that giving govt more tax revenues creates jobs is foolish.

    Besides, if I remember way back, Mr Chisholm's supposition was that $1 in taxes returns to the economy and I disagreed by saying leaving $1 in the private sector returns 100% it to the economy.

    I do not know what business you are in, but in the real world (outside of operating funds), companies do not run to US Bank to deposit profits and collect 0.75% interest, they do seek the highest return on capital which ultimately derives from capital investment thru the avenues I listed above.

    Ultimately, those investments are targeted at creating more product efficiently (at a lower cost.) Which is a secondary benefit to the consumer. However, tacking on a corporate tax will get passed on to the consumre raising his cost for goods.

    Out of curiousity, what kind of work do you do?

  • (Show?)

    RyanLeo Said:

    Julie F,

    Yes I am being dense and it is a lot more forgivable when public employees comment on blogs and parrot the ballot titles just like their manager tells them to when discussing these issues in public.

    I have been and will be stupid on some matters in the future. However, I will not hide who I am and deliberately lie to the public about something that affects their ability to feed their family in the midst of an economic depression for those living on Mainstreet like myself.

    Julie,

    I have yet to see where Ryanleo apologized for his grossly misleading comments which several people, including yourself called him on. It seems to me he has a clear agenda of spreading lies and misinformation about the two measures.

    It's been widely documented that conservative bloggers have been paid to "troll" online. It wouldn't surprise me if this one is of that kind.

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