Frequently Asked Questions
Q. Why are you opposing the legislature’s corporate and personal income tax increases?
A. In the midst of the worst economic crisis in more than 70 years, the legislature voted to permanently increase income taxes on businesses and high-income Oregonians by $733 million – the biggest tax increase in Oregon history. Legislators say it’s only a tax on the rich. They’re wrong. We’ll end up paying more for groceries, gas and other services, and that will impact all Oregonians, especially the poor. Small businesses would be forced to lay off their workers, reduce wages and benefits, or close their doors if voters approve the legislature’s permanent tax increases. Economists estimate these higher taxes will cost 70,0001 Oregonians their jobs.
1. Two studies by respected Oregon economists Bill Conerly and Randall Pozdena examined job impacts of each of the legislature’s proposed tax increases. Dr. Conerly’s study of the personal income tax increases in HB 2649 concluded that it would cost 30,000 full-time-equivalent Oregon jobs. Dr. Pozdena’s concluded that the business tax increases in HB 3405 would cost a further 40,000 full-time-equivalent Oregon jobs. You can download both studies here.
Q. Why would the permanent tax increases in Measures 66 & 67 affect jobs?
A. The legislature’s permanent tax increases tax the very people who create jobs in Oregon. Measures 66 & 67 will close businesses and take even more jobs out of state – devastating in a state with 12.2% unemployment. However, as a recent article in the Portland Tribune pointed out, Oregon’s unemployment is actually highest in the nation when those who are working only part time but need full-time work, and those who have given up looking for work are added to the officially unemployed. Raising taxes always has consequences. William B. Conerly, PhD, a Portland-based economic consultant and former Senior Vice President of First Interstate Bank, estimated the personal income tax increases in Measure 66 would cost up to 30,000 Oregonians their jobs by 2015. Another leading Oregon economist, Randall J. Pozdena, PhD, examined the impact of the business tax increases on Oregon employment. He estimates that, over a 10-year period, the business tax increases in Measure 67 would cost 22,000 to 40,000 Oregonians their jobs – on top of the 30,000 lost to the personal income tax increases. These job losses would be on top of the 131,500 private sector jobs Oregon has already lost in this recession.
Q. Didn’t the legislature have to raise taxes in order to balance the state budget?
A. Not really. State government has not tightened its belt like the rest of us. Despite the current economy, legislators still increased overall state spending by more than 9%, or $4.7 billion. The state already had $1 billion in extra cash reserves to spend without enacting $733 million in tax increases. The legislature is back to business as usual. If these taxes pass, Oregon lawmakers will continue to spend and spend and spend.
One of the reserves used to help balance the current budget is the Rainy Day Fund. It was created just two years ago when coporations – the ones targeted for the 40% increases in taxes in Measures 66 & 67 – pushed the legislature NOT to send $300 million in corporate kicker rebates back to corporations, and instead use the money to create a rainy day fund so there would be some savings available when times got tough. No one knew two years ago how quickly that money would be needed. The business community has long argued to build a rainy day fund so Oregon doesn’t have to consider such deep cuts when the economy sours.
The state can find ways to save money, too. One example: Nearly all private sector and most public sector workers share some cost of their health insurance. If state employees paid as much as the average teacher in Oregon pays toward their health insurance (roughly $180 per month), the state would have saved $211 million in the current budget. Such a change would help improve funding available for schools and other state services.
Read more at www.stopjobkillingtaxes.com.