Debating reform of Oregon's tax policy
So, let's talk.
Let's talk about taxes, tax reform, and Governor Ted's stance on such. Oregon has some of the most unique tax laws in the country, but in this case unique isn't always a good thing as Oregon has struggled to remain afloat economically in regards to public needs, has no ability to save or reinvest surplus funds in a rainy day fund, and has been forced to slash social services at a time when the need for them is increasing.
No wonder I've heard in various discussions that Oregon's tax policy of relying on high property taxes and income taxes, lacking a sales tax, and giving millions of surplus funds back in the form of 'kicker' rebates referred to as "inane", "insane", and "dumb and dumber." (On the flip side, I have also heard that Oregon has some of the most corporate un-friendly tax laws in the country, to which I reply: "Ever heard of the $10 alternative corporate minimum tax?")
So who would know the most about Oregon's sorry financial state? No, it wouldn't be David Reinhard, but it would be Oregon's "chief executive", Governor Ted Kulongoski who has sounded the alarm about the increasing need to rehaul Oregon's tax law for some time now. Given that the state, which Governor Ted inherited at a time of severe economic recession, has petered on a precipitous economic drop for the entire time of his governorship, one might understand how the Governor could utter publicly that Oregon needs to "suspend" the kicker law and that a sales tax might be a necessary thing. Unless, of course, you're a fan of fiscal irresponsibility, as Dave makes clear in his latest column.
So, two things: the kicker and a sales tax. To anyone who's read this blog on a regualr basis, you know how much I think Oregon's "kicker" law is completely ridiculous. Oregon is the only state in the entire country that has such an inane law, which may partly explain why Oregon is consistently bleeding red when it comes to maintaing basic public services. Perhaps my biggest issue with the kicker is that people view it as a tax refund, like they paid more than their share of taxes and therfore deserve the refund. Well, they didn't. You get refunds if you fill out your income tax forms and find that one is coming your way. Oregon's "kicker" law is completely arbitrary. If Oregon's chief economist's budget projections for a biennium is off by 2% or more, then excess funds get returned, with millions being shipped to out-of-state corporations who have done nothing to receive such a surprise "windfall" check. However, this inability to create a rainy day fund- like what every other state has- creates a unique situation where Oregon is unable to prepare for tough economic times while the economy is going great. The Wall Street Journal, which may know a thing or two about economic matters (Dave take note), made this quite clear in their March 24 editorial "Oregon's Coffers Bulge but Services Suffer" (sorry, no link).
Giving money away during present great times rather than saving up for future bad times? Would that make sense for a family to budget themselves in such a manner? Then why does Dave think its so great for a state to budget itself that way?
Oh, because "we can spend our money more wisley then the state." Well, there are three things wrong with that ridiculous statement. One: as I've all ready made clear, it's not "your" money- the kicker isn't a result of tax-payers being over-charged. Two: can individuals really be expected to spend money "more" wisely then the state? No matter how big my kicker check is, it won't be big enough for me to more "wisely" fix the potholes in my street, nor buy books for my neighborhood schools, nor rent myself an Oregon State trooper. A more "wise" approach towards these needs would be to combine my kicker check with others'- which is what the state would be doing if it didn't have to redistribute them out to tax-payers! And last: how would these kicker checks be spent? Dave makes it quite clear: on Christmas presents! Yeah, because what's the problem of having less State Troopers available and more meth-heads on our streets, just as long as I can use my kicker check to buy my Aunt Jo a DVD recorder this Christmas? For some reason, I fail to see how an increase in people's Christmas purchasing power goes toward a more "wise" way to pay for the common good- can somebody make it clear to me?
Look, I'm sorry, I just don't see how the kicker makes any sense at all. And I keep hearing the same tired arguments for it, and they have yet to make a lick of sense. The only thing they do is make my head hurt from the sheer stupidity of it.
Now, a sales tax. I grew up in Washington, which had a sales tax. Somehow, the state didn't implode and go down in flames in the twenty-odd years I lived there. In fact, while I was there, my home state was able to generate a robust high-tech economy, create numerous jobs, and have a renewed commitment to first-class schools. And, somehow, they did all this with a sales tax! Oregon, on the other hand, has none of those things- including a sales tax! I'm not saying Washington's economic success is due to it's sales tax, I am merely pointing something out. The revenue that Washington collected from its sales tax has obviously been re-invested into its infrastructure, creating a robust job market and the educated emplyees ready to fill it. Oregon, on the other hand? I mean, without Nike, who is trying their hardest to live tax-free on the backs of Beaverton's infrastructure, what company or corporation is located in Oregon, supplying high-end jobs and adding to Oregon's infrastructure?
I hear some people argue that they like having no sales tax as it means that a 99 cent candy bar can be bought under a buck. But, again, considering the benefits of having a sales tax, does that argument carry any weight? I mean, consider the number of tourists that come through Oregon, shopping at the Lloyd Mall, drinking wine out in Newberg, going to see Trailblazer games at the Rose Garden- all of this money spent and the state isn't seeing a dime. We're talking millions, if not billions, of dollars here folks. You want a reduced property tax and income tax in Oregon? Fine. Implement a progressive tax on non-essential items, and you can do those things as well. And if you need an example, all you have to do is look across the border.
Dave calls for a vote on these two topics, which the Governor isn't even running on but has merely mentioned publicly, by the Legislature in the fall. That just smacks of political game-playing in the run-up to the election. But certainly debate needs to occur. Voters need to know which candidate has the best interests of Oregon's future at heart: the chief executive, who is all too familiar with the sorry state of Oregon's finances, or the other guy, who is going to toe an ideological line.
The Governor currently has the bully pulpit. It is time for him to use it. He needs to make it clear that tax reform- real tax reform- needs to happen in Oregon.
Let's talk about taxes, tax reform, and Governor Ted's stance on such. Oregon has some of the most unique tax laws in the country, but in this case unique isn't always a good thing as Oregon has struggled to remain afloat economically in regards to public needs, has no ability to save or reinvest surplus funds in a rainy day fund, and has been forced to slash social services at a time when the need for them is increasing.
No wonder I've heard in various discussions that Oregon's tax policy of relying on high property taxes and income taxes, lacking a sales tax, and giving millions of surplus funds back in the form of 'kicker' rebates referred to as "inane", "insane", and "dumb and dumber." (On the flip side, I have also heard that Oregon has some of the most corporate un-friendly tax laws in the country, to which I reply: "Ever heard of the $10 alternative corporate minimum tax?")
So who would know the most about Oregon's sorry financial state? No, it wouldn't be David Reinhard, but it would be Oregon's "chief executive", Governor Ted Kulongoski who has sounded the alarm about the increasing need to rehaul Oregon's tax law for some time now. Given that the state, which Governor Ted inherited at a time of severe economic recession, has petered on a precipitous economic drop for the entire time of his governorship, one might understand how the Governor could utter publicly that Oregon needs to "suspend" the kicker law and that a sales tax might be a necessary thing. Unless, of course, you're a fan of fiscal irresponsibility, as Dave makes clear in his latest column.
So, two things: the kicker and a sales tax. To anyone who's read this blog on a regualr basis, you know how much I think Oregon's "kicker" law is completely ridiculous. Oregon is the only state in the entire country that has such an inane law, which may partly explain why Oregon is consistently bleeding red when it comes to maintaing basic public services. Perhaps my biggest issue with the kicker is that people view it as a tax refund, like they paid more than their share of taxes and therfore deserve the refund. Well, they didn't. You get refunds if you fill out your income tax forms and find that one is coming your way. Oregon's "kicker" law is completely arbitrary. If Oregon's chief economist's budget projections for a biennium is off by 2% or more, then excess funds get returned, with millions being shipped to out-of-state corporations who have done nothing to receive such a surprise "windfall" check. However, this inability to create a rainy day fund- like what every other state has- creates a unique situation where Oregon is unable to prepare for tough economic times while the economy is going great. The Wall Street Journal, which may know a thing or two about economic matters (Dave take note), made this quite clear in their March 24 editorial "Oregon's Coffers Bulge but Services Suffer" (sorry, no link).
Giving money away during present great times rather than saving up for future bad times? Would that make sense for a family to budget themselves in such a manner? Then why does Dave think its so great for a state to budget itself that way?
Oh, because "we can spend our money more wisley then the state." Well, there are three things wrong with that ridiculous statement. One: as I've all ready made clear, it's not "your" money- the kicker isn't a result of tax-payers being over-charged. Two: can individuals really be expected to spend money "more" wisely then the state? No matter how big my kicker check is, it won't be big enough for me to more "wisely" fix the potholes in my street, nor buy books for my neighborhood schools, nor rent myself an Oregon State trooper. A more "wise" approach towards these needs would be to combine my kicker check with others'- which is what the state would be doing if it didn't have to redistribute them out to tax-payers! And last: how would these kicker checks be spent? Dave makes it quite clear: on Christmas presents! Yeah, because what's the problem of having less State Troopers available and more meth-heads on our streets, just as long as I can use my kicker check to buy my Aunt Jo a DVD recorder this Christmas? For some reason, I fail to see how an increase in people's Christmas purchasing power goes toward a more "wise" way to pay for the common good- can somebody make it clear to me?
Look, I'm sorry, I just don't see how the kicker makes any sense at all. And I keep hearing the same tired arguments for it, and they have yet to make a lick of sense. The only thing they do is make my head hurt from the sheer stupidity of it.
Now, a sales tax. I grew up in Washington, which had a sales tax. Somehow, the state didn't implode and go down in flames in the twenty-odd years I lived there. In fact, while I was there, my home state was able to generate a robust high-tech economy, create numerous jobs, and have a renewed commitment to first-class schools. And, somehow, they did all this with a sales tax! Oregon, on the other hand, has none of those things- including a sales tax! I'm not saying Washington's economic success is due to it's sales tax, I am merely pointing something out. The revenue that Washington collected from its sales tax has obviously been re-invested into its infrastructure, creating a robust job market and the educated emplyees ready to fill it. Oregon, on the other hand? I mean, without Nike, who is trying their hardest to live tax-free on the backs of Beaverton's infrastructure, what company or corporation is located in Oregon, supplying high-end jobs and adding to Oregon's infrastructure?
I hear some people argue that they like having no sales tax as it means that a 99 cent candy bar can be bought under a buck. But, again, considering the benefits of having a sales tax, does that argument carry any weight? I mean, consider the number of tourists that come through Oregon, shopping at the Lloyd Mall, drinking wine out in Newberg, going to see Trailblazer games at the Rose Garden- all of this money spent and the state isn't seeing a dime. We're talking millions, if not billions, of dollars here folks. You want a reduced property tax and income tax in Oregon? Fine. Implement a progressive tax on non-essential items, and you can do those things as well. And if you need an example, all you have to do is look across the border.
Dave calls for a vote on these two topics, which the Governor isn't even running on but has merely mentioned publicly, by the Legislature in the fall. That just smacks of political game-playing in the run-up to the election. But certainly debate needs to occur. Voters need to know which candidate has the best interests of Oregon's future at heart: the chief executive, who is all too familiar with the sorry state of Oregon's finances, or the other guy, who is going to toe an ideological line.
The Governor currently has the bully pulpit. It is time for him to use it. He needs to make it clear that tax reform- real tax reform- needs to happen in Oregon.
posted by true_slicky at 6:18 PM
2 Comments:
The biggest hurdle facing those of us who would like to get rid of the kicker is the common perception that somehow it represents "my money" rather tax revenues that the state simply doesn't retain. Since Dave and other conservatives are so fond of business as a model for government, maybe I can explain it to them like this:
The kicker is just like a corporation who, upon having a better-than-expected year, decides to give the stockholders an extra dividend instead of using the unexpected income to maintain a reserve or reinvest and strengthen the company. Would any smart and responsible company act this way? Then why should the State of Oregon?
Good analogy.
I try to offer my analogy of a family budgeting similar to Oregon and the kicker, where instead of saving up for their children's school fund, they blow all their money on Xboxes and hammocks.
But then I remember, that's how we live. We're a credit-based society. And for that reason, it's perfectly find for the state to blow all their money they need in silly rebate checks as voters demand "fiscal responsibility."
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