A couple of new polls suggest that Oregonians are about to raise state taxes on high income citizens and some corporations by passing Measures 66 and 67. Support for the measures may be slipping, though.
I hope they pass.
Oregon is a low tax state, as I noted several years ago. This recent cartoon from the Eugene Register-Guard demolishes the ridiculous anti-tax argument that people and businesses will shun Oregon if state taxes are hiked slightly.
William Yaeger, an Oregon State University economist, did a fine job of pointing out the benefits to the state's economy of passing Measures 66 and 67 in a Register-Guard opinion piece.
Although some might have you believe otherwise, the economics behind Measures 66 and 67 — the tax referenda that Oregonians will be deciding over the next two weeks — actually are not that complicated. The main issues can be framed as a benefit-cost analysis, where public services are the benefits and taxes are the costs.
The economic question is equally simple, and perhaps more to the point: Do the measures’ benefits outweigh their costs?
...In this [short-run] situation, most research clearly shows that raising taxes on high-income families will be less harmful to a state’s economy than reduced public services. So in a world of two bad choices, raising taxes on high-income households is “less bad” than further cuts to public services. It also is more equitable, since many of these public services support the less fortunate in our communities.
Right-wing talk show hosts like Portland's Lars Larson are fond of decrying the "waste" of taking money from the private sector and putting it into the public sector. Yaeger points out that this isn't true.
There is a wealth of economics literature on this topic — dozens of national studies that have looked at state and local taxes, scouring the data for evidence of how to maximize benefits at the minimum cost. One recent summary of those studies concludes that “there is little evidence that state and local tax cuts — when paid for by reducing public services — stimulate economic activity and create jobs,” and that “increases in taxes, when used to expand the quantity and quality of public services, can promote economic development and employment growth.”
Who wants to live or do business in a state where the roads are crumbling, school classrooms are over-crowded, parks are poorly maintained, and universities aren't able to educate a quality work force?
Today I got into a chat with a woman about people who don't like to pay dues to their neighborhood association. She lives in a manufactured home park where the assessment is a whopping $50 a year.
Even so, some residents refuse to pay. She couldn't understand this. "If they'd prefer to live in a messy, run-down area, they should leave," she told me. Exactly.
Anti-tax zealots are the first to complain when government services don't meet expectations. Yet they're unwilling to fund them at an appropriate level. In my previous post I said: (Ron Saxton was a 2006 Republican candidate for governor)
In the same fashion, tax-cut anorexics (otherwise known as right-wing Republicans) have the delusion that government spending can go on a limitless spending diet without ever incurring any ill effects.
I’d like to ask Saxton, “Could you ever see yourself spending more of your household income on health care?” I assume he’d say “Yes.”
If not, I’d follow up with: “What if your wife or child fell ill and needed expensive medical treatment that wasn’t covered by insurance? Would you be willing to spend more money to save the life of a loved one?” Almost all of us would. All of us who have more than an ounce of human compassion.
So Ron, what if it was your beloved state of Oregon that had fallen on hard times and needed more money to cure health, education, environmental, transportation, or other serious problems?
No one should vote for a candidate who says that he’ll never raise taxes. Especially when he lives in a state that already has a below-average state and local tax burden. Fall another ten places in the rankings, from 36 to 46, and Oregon will enjoy the company of Alabama.
Economist Yaeger's opinion piece has an accompanying figure that tells the tale of Oregon taxes and public services. This copy is a bit fuzzy, so head over to the Register-Guard web site for a possibly clearer "original."
The top right chart shows Oregon's student-teacher ratio ranking. It's been sinking steadily. We're now 49 out of the 50 states.
And the lower left chart shows how Oregon state taxes as a percentage of personal income compare to the national average. We've always been below average. Even if the tax measures pass, we still will be -- quite a bit below (note the slight uptick on the right side of the bottom graph line).
So hopefully Oregonians will recognize that raising taxes often is good for a state's economy. Also, a nation's.