Oregon Measures 66 & 67 elicit anti-tax lies

My wife and I have happily mailed in our "yes" votes on Measures 66 and 67. I love to pay taxes. They're the largest contributions to the general good of society (Oregon, United States, world) that we make each year.

These tax measures would slightly increase the amount of money high income Oregonians, and some corporations, pay. If they pass, Oregon still will have one of the most favorable tax burden on businesses.

Currently, even with the new taxes, we're #14 among the 50 states.
Download State business tax climate

So it's ridiculous for the No on 66/67 crowd to claim that the measures will be "job killing" if they pass. Texas has about the same business tax climate (it's #11) as Oregon does, and conservatives like to tout the business-friendliness of that state.

Since facts, and the virtue of unselfishness, argue in favor of Measures 66 and 67, opposition ads have had to resort to lies.

Here's a marvelous example of duplicity recently uncovered by Kari Chisholm of Blue Oregon in "Busted! Latest anti-tax-fairness TV spot features an 'Oregon small business' in... California?!"

Kari looked into a TV ad purportedly showing that "Paula's Bake Shop" would have to lay off two employees if Measure 67 passes. There's just a few BIG problems with this claim.

First, Paula's Bake Shop is in Auburn, California, not Oregon. Second, even if the business was located in this state, it is a sole proprietorship, so almost certainly it would pay zero additional taxes under Measure 67.

If the owners' had an individual taxable income of $125,000 or more ($250,000 for a couple), then they'd pay slightly more in taxes. But if a bake shop is doing that well, the owners can afford to help keep teachers, police officers, and others employed -- and buying cookies.

(To learn more about No on Measure 66/67 lies, check out "Truth surfaces in Oregon despite consultants' efforts.")

Comments

[lynn stevens]

Maybe you like paying more taxes, asshat. When your tax bill comes this year, why don't you just double the amount that you owe? If you like to pay taxes so much, have at it.

[DAVE PETERSON]

I THINK THIS TAX MEASURE SHOULD GO DOWN. NO ONE IN SALEM CAN EVEN THINK OF CUTTING SPENDING. I HAVE LIVED IN OREGON MANY YEARS AND AM GETTING REAL TIRED OF THE CRY WOLF PLOY. IT HAS BEEN USED AS LONG AS I HAVE LIVED HERE. MAYBE WE NEED TO CUT SOCIAL PROGRAMS AND FAT AND TAKE A CUT IN PAY. - HUH MAYBE?

[frustrated]

These measures should go down, but unfortunately Oregon residents can't think for themselves. They let the government tell them how it is and believe it. 56% of the states budget already goes to education and they can't make that work?? These measures are going to hurt a lot of buisnesses who are the future employers of the 11% of oregonians that are unemployed. These measures are a joke. Today is a sad day in Oregon

[Blogger Brian]

frustrated, I heartily disagree. This is a wonderfully happy day in Oregon. People weren't taken in by the lies of the No on 66 & 67 crowd. Oregon isn't a high tax state. Oregon already has some of the lowest business taxes in the country, and ranks below average on our overall tax burden.

Asking the well off to pay a bit more to keep our state from sinking into a financial hole makes good sense. I'm proud of Oregonians and pleased that our state has shown the nation that raising taxes wisely in a recession can be a smart thing to do.

[Dan Gellner]

Brian,

Something to think about. Here is a cut from the State Business Tax Climate index that you cite as documentation.

Tax competition is an unpleasant reality for
state revenue and budget officials, but it is an effective restraint on state and local taxes. It also helps to more efficiently allocate resources because
businesses can locate in the state where they receive the services they need at the lowest cost. When a state imposes higher taxes than a neighboring state, businesses will cross the border to some extent. Therefore states with more competitive
tax systems score well in the SBTCI because
they are best suited to generate economic growth.

In Oregon, most of the larger businesses targeted by measure 67 are located in Portland. Right across the Columbia River lies the state of Washington, which is one of the best tax climate states. What do you think will happen? Portland is already littered with empty office space, this measure will do nothing to bring business to Oregon... It can only hurt the situation. Phil Knight spoke out against 66 and 67. How would you like to see a big For Sale sign on the Nike headquarter campus in Beaverton? All those jobs gone. And then what if Phil moves over the border as well? One of Oregon's wealthiest citizens. Rich people didn't get rich being stupid. They will make changes to preserve the assets they work hard to get and maintain. Having wealthy people and companies around is a good thing for everyone. They buy services of other businesses, they provide jobs, they pay their share of taxes (which is FAR more than most)and they donate to charities and causes.
So after the "3.XX%" of people targeted by the tax hike leave, and the revenue doesn't come, there will still be the 97% of people that aren't affected here. Then who will they tax?
By the way, that propaganda, that it would only affect 3% is crap. Gasoline sales is a high volume/low margin business. If you think they are going to pay the tax out of what little profit is theirs you are mistaken. They will simply raise the price. Just like the price on your cup of Starbuck's coffee. Because they are being taxed on Gross now, (that means before expenses like employees, raw materials, and labor) are taken out. So if the company does stay around, we will ALL be paying for it. But you like paying taxes.

The real solution is that the Oregon government needs to stop wasting taxpayer money, with useless social programs and run a responsible budget. I am not talking about schools and Public Safety either, but those are the services that we are told will be cut if a measure doesn't pass. It's also extortion. Oregon's Government is now our main industry. Overweight with garbage spending. Why cut irresponsible spending when you can tax even more?

This is all basic economics being taught in our high schools right now. But being a Socialist you probably don't believe that this is how it works. And Socialism has such a solid track record too. It isn't Socialism that has made the United States the greatest country in the world... but it might very well be what makes it the worst.

[Blogger Brian]

Dan, you might want to take a look at the details of the Tax Foundations Business Climate index report. As noted in this post, Oregon ranks #14 (even after passage of Measures 66 and 67) while Washington ranks #9. The percentage difference between the state scores is about 5%, 5.59 for Oregon and 5.81 for Washington.

Thus both states have an above average business climate, compared to other states. Looking at what produces that climate, Oregon and Washington are about equal in the corporate tax burden (Oregon is slightly better).

Washington is #1 in personal income taxes, while Oregon is #45, because Washington doesn't have a personal income tax. However, Washington has the highest sales tax in the country, and Oregon property taxes rank considerably lower than Washington's (we're #9 while Washington is #21).

So it's a complex decision as to which state is better for any particular business. An article in today's Oregonian points out that Washington has a state business and occupation tax, which is a levy on gross proceeds.

"This tax is applied even if the company makes no profit." So Washington has a tax very much like Measure 67. Plus, Washington has a sales tax of 8.2%, so a business has to pay that for its own spending.

[Dan Gellner]

Brian you can try and justify numbers, from the Government created pamphlet as much as you like, but that data is now obsolete to compare. As useful as the years of manipulated data from global warming. Here is a letter printed in your favorite paper, The Oregonian (Pravda) from Phil Knight, whom I previously mentioned.

http://www.oregoncatalyst.com/index.php?archives/2974-Phil-Knight-hits-hard-on-Measure-66-67.html&print=1

I hadn't read this until after I posted yesterday. I forgot about all of the companies that have left Oregon in the recent past. Oregon is losing corporations, jobs, and people already. This new tax will not do anything to help. It can only hurt the current bad climate. He hints in the letter what his intentions are... I guess we will see what happens next. He even specifically named Washington, (I was just guessing on that). You can call it "scare tactics" but this is a person who can actually carry it out.

A tax that targets 3% of the wealthiest citizens and corporations is a bad idea. That 3% will go elsewhere, and they have the money to do it. Then who will pay for the Government's out of control spending?

Socialism works well until there is nobody left to tax. Marx never figured out the "end game". So far the best solution has been to switch to capitalism. Like China.

BTW, if a company were to locate in Vancouver, sales tax can be alleviated on major purchases by buying from across the border in Portland. I would bet you could buy semi-truck loads of office supplies and have them delivered. I have often pondered that if Washington had an income tax, and Oregon had a sales tax, Vancouver would not exist. It's a unique arbitrage and smart corporations will seek out any advantage they can get.

[Blogger Brian]

Dan, you're wrong that the Tax Foundation report is a "Government created pamphlet." The Tax Foundation is an independent organization that actually is quite conservative. It's responsible for the annual Tax Freedom Day information.
http://en.wikipedia.org/wiki/Tax_Foundation

You should educate yourself about the group, rather than make statements that aren't true. This is one of my main gripes about anti-tax zealots. They make their minds up first, then make up facts to fit those preconceptions. Here's what the Tax Foundation is all about:
http://www.taxfoundation.org/about/

The facts remain: Oregon has a business climate that is well above average (#14) among the fifty states even after the passage of Measures 66 and 67. Smart businesses who want to keep making money here will recognize that, and not spend a lot of money making a purely political statement by moving to another state.

[Dan Gellner]

Anti-Tax Zealot?!!! Well okay, I guess I called you a Socialist first. Fine, lets stay within the confines of your cited publication. Here's a news release from it.

" Oregon voters yesterday upheld Measure 66, which will raise income taxes on high-earners, by 53.69 percent to 46.31 percent, and Measure 67, which raised corporate income taxes, by 53.03 to 46.97. Tax Foundation Director of State Projects Joseph Henchman provided the following statement:

"Voters decided that two tax increases passed by the legislature last summer will stand. The success of Proposal 66 means the top income earners in the state will pay a rate of 11 percent (tied for highest state rate in the nation with Hawaii) on incomes over $250,000 a year. Proposal 67 added new bracket and top rate for corporations earning over $250,000 a year."

Wow, so last year we were 8th, and now we are 14th. Now that's progress! Our business climate sucked at 8th, so 14th is a lot better.

Brian, you and I are never going to agree. The way businesses see 14th, is that there are 13 better choices out there. It's not a political statement, its business. Loyalty to stay in a place only lasts so long if you are being singled out to pay the brunt for others based on your own hard earned success, personal risk and accountability.

[DJ]

Those who fail to learn from history (Oregon legislators and voters) are doomed to repeat it.

"Soak the Rich, Lose the Rich" WSJ 5/18/2009
http://online.wsj.com/article/SB124260067214828295.html
Excerpt:
"Updating some research from Richard Vedder of Ohio University, we found that from 1998 to 2007, more than 1,100 people every day including Sundays and holidays moved from the nine highest income-tax states such as California, New Jersey, New York and Ohio and relocated mostly to the nine tax-haven states with no income tax, including Florida, Nevada, New Hampshire and Texas. We also found that over these same years the no-income tax states created 89% more jobs and had 32% faster personal income growth than their high-tax counterparts.

Did the greater prosperity in low-tax states happen by chance? Is it coincidence that the two highest tax-rate states in the nation, California and New York, have the biggest fiscal holes to repair? No. Dozens of academic studies -- old and new -- have found clear and irrefutable statistical evidence that high state and local taxes repel jobs and businesses.

More recently, Barry W. Poulson of the University of Colorado last year examined many factors that explain why some states grew richer than others from 1964 to 2004 and found "a significant negative impact of higher marginal tax rates on state economic growth." In other words, soaking the rich doesn't work. To the contrary, middle-class workers end up taking the hit.

One last point: States aren't simply competing with each other. As Texas Gov. Rick Perry recently told us, "Our state is competing with Germany, France, Japan and China for business. We'd better have a pro-growth tax system or those American jobs will be out-sourced." Gov. Perry and Texas have the jobs and prosperity model exactly right. Texas created more new jobs in 2008 than all other 49 states combined. And Texas is the only state other than Georgia and North Dakota that is cutting taxes this year."