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Republicans take on the Max factor

GOP assails Rep. Max Williams' tax plan while respecting his courage

SALEM Ð As the room buzzed with anticipation before the hearing, Rep. Max Williams looked up and saw Kevin Mannix walking purposefully toward him.

Uh-oh.

Mannix is chairman of the Oregon Republican Party, and Williams is a Tigard Republican who may run for statewide office someday. But Williams is part of a group pushing a tax reform plan that includes the introduction of a 5 percent sales tax, a direct challenge to a bedrock Republican party principle. The plan has even been dubbed the 'Max Tax.'

Mannix stood before the House Revenue Committee's big, curved desk and chatted amiably with Williams. When the hearing started, Mannix testified against the sales tax while praising the political courage of its supporters.

The next day he issued a statewide e-mail summoning party members to a full frontal assault on the plan through e-mails, phone calls, letters and talk radio.

Life has been like that for Max Williams lately. He's found himself at odds with his party, his leaders in the House and the prevailing political wisdom about the sales tax in Oregon. All that, and radio talk-show host Lars Larson calls him 'Fatso.'

So what's a promising young Republican like Williams doing in the middle of all this sales tax talk?

It's not complicated. Williams' core group of tax reformers see their plan as the best way to provide a stable source of money for schools and other services while spurring economic growth and job creation.

'I'm a native Oregonian,' he said. 'We have a genetic disposition against a sales tax. I understand this. But I don't see anything un-Republican about it. I'm following in the footsteps of some great Republicans. I grew up admiring Tom McCall and Vic Atiyeh.'

Williams, 39, seems an unlikely candidate for demonization by Republicans. The Bend native, an attorney with Portland's Miller Nash law firm, is a dad, a husband, an Eagle Scout, a devout Mormon and a member of the Tigard Area Chamber of Commerce.

He has, in his three terms, won the enmity of environmentalists, the support of abortion opponents and the top rating among House members in Willamette Week's biennial survey ranking state lawmakers. He's respected for his brains, his commitment and his sense of humor, once telling other lawmakers that if they want beer they shouldn't ask the Mormon to send out for the after-hours pizza.

Since early May, Williams and a group of other centrists have met after hours to talk about tax reform. They want a tax reform vote Ñ or at least a major step in that direction Ñ before lawmakers wrap up the 2003 session.

They call themselves the Usual Suspects, a group that includes, at its core, Reps. Lane Shetterly, R-Dallas; Rob Patridge, R-Medford; and Ben Westlund, R-Tumalo. Other lawmakers of both parties and various political persuasions have taken part at various times. Westlund brought unusual poignancy to the debate last month when he took to the House floor and discussed his struggle with lung cancer in his call for tax reform.

The group has sketched out a plan that:

• Lowers the top personal income tax rate from 9 percent to

6 percent in 2005 and 5 percent in 2007.

• Reduces the capital gains tax from 9 percent to 4 percent in 2005 and eliminates it altogether in 2007.

• Phases out the inheritance tax.

• Adds a 5 percent sales tax on goods and services dedicated to K-12 education. It would exempt food, prescription drugs, utility payments and housing.

• Refers the 5 percent tax rate to voters as a constitutional amendment, changeable by the Legislature only during 'economic crisis' and then only for short periods without a public vote.

Legislators have a good vantage from which to see the impact of the state's tax system, said Rep. Mark Hass, D-Raleigh Hills, an occasional participant in the meetings of the Usual Suspects.

'If everybody in this state could serve a couple of terms on the House Revenue Committee,' Hass said, 'they'd all be lined up in favor of tax reform.'

Two weeks of revenue committee hearings wound up last Friday, but Williams still has no idea if the package will come up for a committee vote. He hopes to work behind the scenes in the days and weeks ahead to ensure that the session doesn't end without a vote or at least a promise to come back in special session to address tax reform.

Williams' role in the process, though, hasn't prompted much controversy back home. A rough estimate by his legislative aide, Jeni Rackstraw, shows calls, e-mails and letters running 4-to-1 in support. Local officials said his plan has generated opponents and supporters but no unexpected outrage.

'Everybody's saying he may be beating his head against a post,' said Tigard Mayor Jim Griffith, 'but he also may be coming up with something that makes sense.'

The sales tax, defeated statewide nine times, fails in part because many voters don't trust government, said Matt Evans, executive director of Oregon Tax Research.

'Few people in this state believe a 5 percent sales tax today would be a 5 percent sales tax five years from now,' Evans said. 'The pressure to increase the rate to fund education would be enormous.'

Political talk pegs Williams as a possible candidate for statewide office, with attorney general usually leading the list of options. But Williams said he's not going to think about that until the tax issue is resolved, either in regular or special session.

Mannix may be rallying the GOP against the plan, but he still sees Williams as a promising candidate. He thinks Williams' sales tax stance would hurt him in a GOP primary but help in a general election. His opposition to abortion could cushion conservative opposition, Mannix added.

'Many rank-and-file Republicans are livid at the idea of a sales tax,' Mannix said. 'But Max has demonstrated a willingness to stick his head out, and those strengths would look good in a secretary of state's race or an attorney general's race.'

'He may not be in office as a result of all this,' said Dan Murphy, president of the Tigard Area Chamber of Commerce. 'But if he votes his conscience, he can live with that. You'll never please all the people all the time.'