Respect Oregonians' Historic "Yes" Vote

Chuck Sheketoff

A year ago Oregonians glowed under the national spotlight. Facing a severe fiscal crisis brought on by the recession, Oregonians voted for a modest tax increase on the wealthiest households and corporations to help protect our schools, our health and human services and our public safety system.

The resounding victory of Measures 66 and 67 demonstrated that Oregonians had cut through the fog of misinformation churned by big business during the campaign. Oregonians said "yes" to protecting important public structures and Oregon’s economy.

But on this anniversary of the historic vote, efforts are underway to undermine the will of Oregon’s voters. Some lawmakers have introduced bills that completely undo or chip away at Measures 66 and 67. And that's why Oregonians must once again raise their voices in defense of the public structures that we value.

Read the rest of Respect Oregonians’ Historic “Yes” Vote and return here to discuss.


Oregon Center for Public PolicyChuck Sheketoff is the executive director of the Oregon Center for Public Policy. You can sign up to receive email notification of OCPP materials at www.ocpp.org.

Comments

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    Is Kitz included? He talked about rolling them back during the campaign.

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      Source? I found this in the Register-Guard's primary endorsement:

      Kitzhaber also shows a willingness to stray from Democratic orthodoxies. He says Ballot Measures 66 and 67, crafted by his party and approved by voters in January, increased taxes in ways that created the perception of a hostile business climate. Kitzhaber is willing to consider a rollback of the increases, if state finances allow. http://special.registerguard.com/csp/cms/sites/web/opinion/24716464-47/kitzhaber-oregon-bradbury-state-governor.csp

      More emphatic, is what he said to the Bend Bulletin during the General:

      John Kitzhaber: I would not repeal 66 and 67, but instead take a comprehensive look at Oregon’s system of revenue to increase fiscal stability. We must make Oregon’s revenue system fair, stable and aligned with our business and economic development objectives. The discussion should begin by asking Oregonians if it is prudent to continue to rely solely on personal and corporate income taxes for over 90 percent of the state budget, and reforms to any taxes should not just consider the benefits to the taxpayer, but the benefits to all Oregonians. Though no revenue options are popular, all will be discussed. This is an important discussion we need to have in order to increase budget stability and avoid the boom and bust cycles that have plagued Oregon’s past. http://www.thevoterguide.org/v/bendbulletin10/index.do?i=1

      Given that, quoting the first comment, state finances clearly do not allow, I certainly don't think anyone should expect Kitz to look for more ways to reduce state revenues--that was Dudley's dumb idea, and it went down with him, thank Gawd!

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    66 & 67 did exactly what your opposition said it would do.

    "Instead of $180 million collected last year from the new tax, the state received $130 million"

    ...

    "One reason revenues are so low is that about one-quarter of the rich tax filers seem to have gone missing."

    ...

    "The tax wasn't enacted into law until June 2009 but was retroactively applied to January 1, 2009. So for the first half of the year wealthy Oregon residents weren't able to take steps to avoid the tax ambush because they didn't see it coming. This suggests that a bigger revenue loss from tax mitigation strategies will show up on tax return data in 2010 and 2011. The Revenue Office has already downwardly revised tax collection projections for the first three years by one-third."

    ...

    "The biggest loss of revenues came from capital gains receipts. The new 11% top tax rate applies to stock and asset sales, which means that Oregonians now pay virtually the highest capital gains tax in North America ... Successful entrepreneurs like Nike owner Phil Knight don't get rich by being fools with their money. They don't sell tens of millions of dollars of assets when capital gains taxes go up."

    ...

    "All of this is an instant replay of what happened in Maryland in 2008 when the legislature in Annapolis instituted a millionaire tax. There roughly one-third of the state's millionaire households vanished from the tax rolls after rates went up.

    If Salem officials want to find where the millionaires went, they might start the search in Texas, the state that leads the nation in job creation—and has a top income and capital gains tax rate 11 percentage points lower than Oregon's."

    SOURCE: http://online.wsj.com/article/SB10001424052748704034804576026233823935442.html

    Own it.

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    I'm not for cutting taxes on the rich right now (yes, if you make more than $250,000, you're rich). Oregon is having a hard enough time making ends meet that we don't have to make it harder by cutting capital gains taxes.

    That said, I'd disagree with the core argument here - that passage of Measures 66 and 67 meant the voters were specifically asking for specific tax policies to be implemented in a specific way. While those votes were very impressive and historic, we must be careful.

    Specifically, the implication that ballot measures reflect the crystal-clear desires of the electorate is rife with problems. Measures give only a binary choice: status quo, or one specific option for change.

    As we saw with Measure 37 and 49, voters may want an Option C. And since Measure 49 passed with more than 60% of the vote, a majority of voters may have wanted something even stronger than it.

    And then of course we get into the problems of what voters want versus what they believe they're getting, thanks to 30-second political ads, and...

    Aware of this sort of challenge, some states require changes to recent ballot measures to go back before voters, or to be supported by a supermajority in the legislature. I'm not advocating that, but it's an interesting response to these conundrums (conundra?)

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      Evan - We never said Oregonians voted for a specific tax policies other than what was on the ballot.

      Read what we say: "Oregonians said 'yes' to protecting important public structures and Oregon’s economy."

      You agree with that, right?

      We implied the past tense was also true when we wrote voters "raise[d] their voices in defense of the public structures that we value."

      Do you challenge that?

      And then we called on them to raise their voices again, this time before the Leg. Any quarrels with that?

      Some of the proposals would repeal the measures outright and some "would partially override the will of the voters." What do we mean by that? We say "by creating a work penalty" that takes money away from the public structures they voted to protect.

      Yes, voters didn't vote on a work penalty (it wasn't at issue), but they did vote to preserve public structures. Right?

      The reason "Handing a big tax break to the wealthiest Oregonians at the expense of everyone else could not be more at odds with the will of Oregonians reflected in last year's historic vote." is because "Such a move would take needed money away from our schools and other critical public services— exactly the opposite of what voters demanded a year ago."

      Didn't they demand that schools and other critical public structures be funded? I agree that votes are not crystal clear, but protecting public structures was the central issue on the "yes" side, and it certainly isn't a stretch to think that was underlying the vote.

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        I'm just not able to divine "the will" of 678,000 yes and 586,000 no votes (Measure 67) or 688,000 yes and 579,000 no votes (Measure 66). Or the 66% of Oregonians who didn't vote (many of whom aren't eligible).

        The majority of voters (hooray!) voted to pass the measures.

        Some yes voters may have wanted to chip away parts of the measures, many others may have wanted to strengthen them. Some who voted no may have liked 95% of a measure.

        I think you're right, and it's fair to conclude, that Oregon voters sent a historic message in the face of a withering, misleading opposition campaign: it's sometimes appropriate to raise certain taxes to fund public services. Legislators would do well to remember that.

        I'm not eager to go much further than that.

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    Or heck, you could just tax me on the word "specific" above. Eek!

    Geoff, the WSJ baloney has been completely debunked as time-machine fantasies.

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    As somebody whose household is gonna pay a relatively HUGE freaking capital gains tax this year, it pisses me off that capital gains (and dividends and inheritances) aren't taxed at exactly the same rate as earned income.

    If it makes the other people who are gonna have to pay feel better, I suggest they do what we did to avoid taxes... have 10% of the net go directly to non-profits.

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    At a time when more and more school districts are looking at millions in cuts and proposals that will mean fewer days for students, less staff in the schools, and school closures, now is not the time to bring in less revenue.

    Voters in this state heard the call of the supporters of both measures and understood that public education means we are preparing the next generation of our workforce. Without the revenue, that has become a stopgap measures to all of the bleeding, what do you think will happen to the state of public education in Oregon?

    Which lawmakers are proposing the changes? I would be more than willing to invite them to meet with teachers, support staff or school board members anywhere in Oregon.

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      I held my nose and voted 'yes'. It didn't have a darn thing to do with Oregon public education. Perhaps you and Chuck both misread the results - which were neither overwhelming, nor lasting.

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    I liken this issue to the healthcare bill. Repeal seems fruitless, but why can't certain revisions or changes be considered?

    From a business perspective, there is nothing logical or beneficial to a state fee (tax) on revenues rather than profits. Especially impacted are volume businesses with low margins (manufacturing, agriculture, grocery sales, commercial and residential construction, etc.) A revision of Measures 67 to exempt or provide some type of offsetting incentive specifically to traded-sector companies would be a good start. Or, at the very least, amending it to be based on profits, rather than revenues.

    We may never agree completely on these measures; in fact, I know that won't happen. But given the angst and division 66 & 67 created in this state, what's wrong with at least considering some tweaks that have impacts to businesses you never considered? Compromise on some areas of these measures might go a long way in repairing some of the damaged relationships.

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      As was argued during the debate here on these measures: If these businesses cannot afford these ity bity taxes, then either the owners are stupid or the business should just fail.

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    Well, that's your opinion, Michael.

    They aren't ity bity to every business. And I still can't wrap my head around taxing revenues instead of profits. It CAN make a big difference for high volume businesses with low margins.

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      Sorry, should have been more clear. NOT MY OPINION, but the opinion of many here. I AGREE totally with your statement above.

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      Please provide an example of a profitable business that would suddenly fail if forced to raise prices by one tenth of one percent.

      I'd prefer a real example, but a theoretical one will do for now.

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        Kari,

        First, I disagree with how you framed your question. I never suggested a business would fail; I was making the point that the tax implication is greater for high volume businesses with low margins. Let's not put words in my mouth, please.

        Grocery and some retail stores fall into this category. Many farmers and ranchers fall into this category, especially those that are well-diversified beyond just farming the land or raising cattle. (I have a friend in Harrisburg who is affected by this as a grass seed farmer; he operates the farm and numerous other companies under the C corporation.

        My uncle runs a company that falls into this category...a machine repair, manufacturing, and rental/sales facility for big equipment. His volume is high, but margins low.

        A sign recycling business that I work with also fits this bill.

        And while your use of the "one tenth of one percent" aims to minimize the impact, it's real. Try operating said business, and dealing with the impacts of the recession at the same time - and then having taxes raised on your revenues.

        I have always been an opponent of 66 & 67, but I'm not a fanatic about it. I'm not suggesting repeal, just some minor tweaks.

        My goodness, maybe y'all could admit that the measures weren't perfect.

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          Of course they're not perfect.

          But the gross-sales aspect was a critical piece of the puzzle - since the whole point was to create some tax payment for the companies that expense their way out of taxes entirely (Intel, I'm looking at you.)

          It wasn't some minor little aspect that was an accidental glitch. It was the whole point.

          And far from "minimizing" it by mentioning that it is roughly 1/10th of 1%, my point is to describe it accurately.

          There are plenty of folks out there claiming that a 0.1% tax on revenues is the equivalent of the roof caving in on their businesses.

          I understand what a high-volume, low-margin business is - and you've provided some nice examples.

          But that wasn't the question. The question was: which of these businesses would fail - or, sure, have a "big difference" - if they had to simply pass along that price increase to their customers.

          I'll give you a hint: You're looking for an Oregon business who competes almost entirely with out-of-state competitors (and thus not subject to the tax) where a price difference of 0.1% is meaningful to the customer.

          I can't think of one. Maybe you can.

          Companies whose primary competition is in-state -- like gas stations and grocery stores - won't be impacted competitively. Just raise prices by 0.1%, like all their competitors will, and all is well. No sky falling. No roof caving in.

          For example: An average 12-gallon tank of $3/gal gas would go from $36 to $36.04 -- hardly something that customers will notice, esp. given the fluctuation in gas prices.

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