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Change our tax system? Maybe

Wyden could lead national effort, as state mulls plans


As tax day approaches, calls for reform are in the air.

Oregon U.S. Sen. Ron Wyden is promising to use his recent appointment to chair the Senate Finance Committee to reform the federal tax system. Gov. John Kitzhaber is working on a state and local tax reform plan that will be a top priority if he is re-elected. And local government officials are increasingly saying the state’s complex property tax limitation must be reformed.

That’s good news to most Portland and Oregon residents, according to the 2013 Oregon Values and Beliefs Survey. It found that a majority of Oregonians — 63 percent — believe the current tax system is unfair. That feeling is even stronger in Portland at 67 percent.

Majorities also believe change is needed in Oregon’s tax system at this time — 64 percent statewide and 72 percent in the city.

As for changes, most believe the tax system should be overhauled to be more simple and straight forward — 58 percent statewide and 76 percent in the city. And majorities believe that those who make the most money should pay the most in taxes — 67 percent of Oregonians say that, as do 89 percent of Portlanders.

Anyone looking for guidance beyond that is going to be frustrated by much of the rest of the survey, however. It finds that Portlanders and Oregonians are split on both the causes of the problems and the possible solutions.

For example, Oregonians are evenly split on whether the state’s current system of just income and property taxes is too unstable to pay for public services. Forty-three percent agree and 42 percent disagree. Most Portlander agree the system is too unstable, however, by a margin of 58 to 27 percent.

Oregonians are also evenly divided on whether there are too many exemptions in the state’s tax system, with 36 percent agreeing and 36 percent disagreeing. Portlanders are more convinced there are too many exemptions, however, by a margin of 49 to 36 percent.

Oregonians and Portlanders even disagree on whether personal income taxes are too high. Most residents in the state — 61 percent — agree. But opinions are almost evenly split in the city, with 45 percent agreeing and 44 percent disagreeing. Complicating the picture are disagreements on how well government spends tax money.

Oregonians are almost evenly split on whether government spends too much on public services and taxes should be reduced (30 percent), governments spends the right amount on public services and taxes should remain the same (31 percent), and government doesn’t spend enough on public service and some taxes should be increased (28 percent).

In Portland, 51 percent supports more taxes and services, 26 percent thinks they’re both just right, and only 17 percent wants them reduced.

A majority of Oregonians — 64 percent — also believes government is wasteful and inefficient with our money and cannot be trusted to make good decisions. That feeling is more tempered in Portland, with 46 percent agreeing and 51 percent disagreeing.

Broken tax code

Despite the distrust of government, there’s good news in the survey for elected leaders willing to push for tax reform. Most Oregonians and Portlanders believe taxes are in fact necessary to pay for the common good — 86 percent statewide and 94 percent in the city. In theory, they will support reforms they believe are improvements.

That should be some comfort to Wyden, a Democrat, who has introduced the first bipartisan, comprehensive tax reform legislation offered in more than 25 years. Called the Bipartisan Tax Fairness and Simplification Act, it is co-sponsored by Republican Sen. Dan Coats of Indiana.

Recognizing that the nation’s tax code is broken, Wyden has led the effort for comprehensive tax reform that will simplify the tax code, bring down corporate rates and make the United States more globally competitive. Styled after the 1986 tax reform effort led by former Republican Oregon U.S. Sen. Bon Packwood, it seeks to simultaneously reform both the corporate and individual tax codes. it includes recommendations from the 2010 Fiscal Commission’s report and has been endorsed by a range of economists, think tanks and opinion leaders.

Kitzhaber is working with Oregon business and labor leaders on a comprehensive tax reform effort. Details have not been released and Kitzhaber is unlikely to unveil it during his 2014 re-election campaign out of fear that it will lead to discussions of the third rail of Oregon politics, the sales tax. But it would be a top priority of his fourth and final term as governor if he wins.

Some Oregon elected officials are not afraid to propose a sales tax, however, including state Sen. Mark Hass (D-Beaverton). Hass has proposed a 5 percent sales tax that would raise an estimated $488 million a year. Among other things, the money could be used to lower income taxes and ease any shift in the property tax limitation system that currently has homeowners paying wildly different taxes on properties of similar value.

Tax reform questions

The 2013 Oregon Values & Beliefs Survey is the third in a series of statewide polls on attitudes conducted by Portland’s DHM Research. It was sponsored by the Oregon Community Foundation, Oregon Health and Science University, Oregon Public Broadcasting and Oregon State University.

DHM Co-founder Adam Davis says the 2013 survey intentionally did not include questions on specific tax reform plans because none had been proposed when the survey was taken. Without details, responses to such plans would be largely meaningless.

The survey can be found at www.oregonvalueproject.org