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Dont debate false choices

Our Opinion

The 2009 Legislature's decision to permanently raise taxes on Oregon's businesses and high-income individuals is looking less intelligent all the time.

On Friday, a coalition of business groups opposed to the tax increases turned in more than enough petition signatures to force an almost-certain January election on the issue. This was hardly surprising, considering that legislators were warned last summer that their tax-increase plan would be challenged on the ballot.

Yet, the Legislature, dominated by Democrats, persisted with these permanent, and in some instances unfair, tax hikes because they believed they could sell a majority of Oregonians on the idea that someone else - in this case, businesses and higher-income people - could close a budget gap brought on by the recession.

We're betting, however, that this election battle will be more difficult and much uglier than legislators expected. And in part, that's because voters can see through the false choices they are being asked to make.

Increases will affect everyone

The first of those false choices is the argument that if businesses don't pay higher taxes, then individuals are the losers. Already, we hear rhetoric about how Oregon corporations must pay their fair share - how individual taxpayers shoulder too much of the burden of funding government.

But that line of reasoning ignores the fact that, without employment of Oregonians by the private sector, there would be no source of funding - none whatsoever - to pay for the public sector. If businesses did not employ people, no one would be paying income taxes. And when taxes are increased on businesses, their likely response will be to employ fewer people, or raise prices.

A second false choice will be the assertion that if these tax increases aren't upheld, the state must make a corresponding reduction in its budget - endangering schools, health care and other vital services. In truth, if voters reject these tax increases in January, the Legislature and governor will have options to consider during a special session in February.

They could make deep cutbacks, or they could pass other, more strategic revenue measures that are not permanent.

Don't pollute the issue

Democratic legislators should have given more thought to the alternatives - and to balance - before ramming through these tax increases last summer. But they naively bought into the belief that Oregon businesses were getting a free ride. And they didn't give sufficient consideration to the consequences of permanently raising taxes - consequences that include suppressing the ability of businesses to keep creating jobs into the future.

A more short-term consequence is the one that's becoming obvious now: By forcing through tax increases that were certain to generate vigorous and well-financed opposition, the Legislature only created more uncertainty for schools and other state-supported services that now must await the outcome of the January election.

Legislators had the opportunity during the 2009 session to pass a more moderate and supportable package that included temporary tax increases to get the state through the recession. We strongly suspect they will have the chance again in February after voters repeal these tax measures in January.

But for any business-tax increase to remain viable - and to not poison the public's view of employers - tax supporters, including Democrat legislators and unions, must avoid polluting the issue.

If they persist in presenting Oregonians with false choices that demonize the private sector and threaten deep budget cuts as the only alternative, they truly won't have any options left when they likely lose their showdown in January.