Guest opinion: Tax policy should focus on fairness
Eliminating income taxes on the poor at best a Band-Aid solution
At the recent Oregon Leadership Summit, the states business interests voiced concerns about low income Oregonians being taxed too much.
Be careful about the crocodile tears coming from the business lobby in the Salem Puzzle Palace. Even if we eliminated all income taxes on Oregonians who live below the poverty line 17.2 percent of us this wont solve the problem. But it does provide cover for big business that dont pay their fair share of taxes.
Oregonians, a job loss or health care crisis away from homelessness, will need help via food stamps (which are being cut), housing vouchers (which are being cut) and human services (which are being cut). Without moving these Oregonians into family-wage jobs, a tax plan alone will not do the job.
What would be helpful is for corporate Oregon to train future workers via apprenticeships instead of leaving this up to an already overburdened education system. Would-be workers are an investment. Why should the public pay for such an investment?
The same goes for getting corporate Oregon to subsidize work force housing for its employees near their places of work. But the business lobby in Oregon refuses to step up to such responsibilities.
In the late 1990s, the business lobby got the Legislature to tax only the percentage of sales being done in Oregon for apportioning United States profits to the state.
By no longer taking into account the share of their property or payroll in the state as had been done in the past to determine the share of U.S. profits that were subject to Oregon taxes corporations such as Intel and Nike pay only a minimum tax.
Before this change in tax law, Intel the states largest employer paid $50 million per year in income taxes. Now they pay next to nothing: around $150 per year.
If we dont tax people below the poverty line, which we shouldnt, and we dont tax traded sector corporations who get huge subsidies via the Strategic Investment Program (Intel gets the most), then who is left to pay local property taxes and Oregons income tax to support a high quality education system and other public investments?
You know: its the rest of us little people. And since the middle class and small businesses are being squeezed, there is less and less to tax.
So where does Gov. Kitzhaber and the business lobby propose Oregon get more money for funding early childhood education, K-12, community colleges and higher education?
When you hold firms such as Intel and Nike harmless for 30 years with a no new taxes pledge, you have limited options: make government more efficient, create more jobs and with it more taxpayers, or get Oregonians to vote for a sales tax.
Everyone is for efficiency, but the reality is that since the passage of Measure 5 in 1991, we have been there and done that at the cost of low income Oregonians. Drawing more high paid outsiders to Oregon increases the demand for new services such as schools and roads, which erase any savings we would get from the increased income taxes they pay. And the sales tax will be DOA.
So what to do?
Kitzhaber is boxed in by his own tax giveaways to Intel and Nike. Its not about no new taxes, but tax fairness.
Russ Dondero is professor emeritus at Pacific University