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Citizen's View: IP 28 asks companies to take responsibility, alter behavior

The Review’s lead story in the May 26 issue (“Tax would raise billions, cut jobs and growth”) takes a strong stand in opposition to IP 28, the initiative to increase corporate taxes. Its Opinion piece in the same edition reinforces that opposition.

Both articles stress that “the costs of the tax would likely trickle down to consumers, increasing prices on daily items.” The argument makes sense: If you are a consumer, or if you are interested in helping the poor, then you, too, should oppose IP 28.

However, both articles miss the point of the tax; both fail to look at the hypocrisy of the argument, as well as the long-term benefits of the tax.

In order to understand the long-term benefits, we need an analogy. Let’s go back to the beginning of the Industrial Revolution. As people rushed to the cities for jobs in manufacturing, employers could pay them next to nothing, just enough to keep them alive. The workers revolted; they demanded higher wages. The owners said, “If we pay you more, we’ll have to increase the cost of the products you manufacture. We’ll sell fewer products; we’ll have to lay off workers; we may go out of business. In which case, all workers will have no jobs at all.”

The chastened workers returned to their dreary tasks. But soon again they rebelled, because they could barely feed themselves. Eventually, the owners gave in and paid higher wages. And that was the true beginning of the miracle of the Industrial Revolution, because when workers had more money than to simply buy food, when they had disposable income, they could afford the products they were making. Demand for those products as well as other products rose. Production increased everywhere. The country was blessed with ever-rising prosperity.

Now let’s look at IP 28. From the employers’ point of view, IP 28 raises the cost of production, and (from the employers’ point of view) those costs must be passed onto the consumers. In other words, punish the consumers.

Now let’s look at IP 28 from the consumer’s point of view. Consumers who are in favor of IP 28 are saying, “We propose a rise in corporate tax not so employers will increase the costs to us, but so that employers will tighten their own belts, that they will pay those additional taxes out of corporate profits and that they will reduce the exorbitant salaries they pay themselves.”

Consumers who are in favor of IP 28 argue that it is hypocritical of owners to claim, on the one hand, that they care about the additional costs that consumers will have to pay for products, and then on the other hand to pass those costs onto consumers. Instead, owners should take responsibility for the huge and dangerous income gap in this country by recognizing that IP 28, like the rebellions of employees 200 years ago, is a sign that people are fed up with being punished for a tax such as this that would, if passed, benefit the whole society.

People are fed up with the gross inequality and the ever-widening gap between rich and poor. People are fed up with being blamed and punished. It is high time the decision-makers took responsibility for the mess that has led to IP 28 and that they changed their own behavior.A vote in favor of IP 28 is a vote for a civil society. Vote Yes on IP 28.

Peter Wright is a Lake Oswego resident.