| Quick. Pick from
the four statements below the one that best expresses your
point of view:
A. I want to take money out of the hands of the middle
class and give it to more prosperous Oregonians.
B. I want to cut funding for services most Oregonians need.
C. To hell with the details! I just want to make the rich
richer!
D. All of the above.
By welcoming the tax-refund checks that came into our homes
this past week, we've inadvertently chosen D as our answer.
Thanks to Oregon Revised Statute 291.349(6)(d), when state
tax revenues exceed forecasts by 2 percent, taxpayers get
a refund--if the Legislature approves. This year, just in
time for the holiday shopping season, Oregonians will get
back $167 million--a 4.57 percent refund. Given current
state budget allocations, 59 cents of every dollar refunded
will come from education; 20 cents from human services;
14 cents from public safety; and the remaining 7 cents from
smaller state agencies, including those charged with shepherding
our natural resources.
The kicker is part of a larger tax revolt that has its
origins in California's Jarvis-Gann amendments of the late
1970s. Here, the tax revolt's major element is still the
property tax limitations put in place by Measure 5 and continued
by measures 47 and 50.
The continuation of kicker in the face of reduced property
taxes means Oregonians still believe that reducing taxes
will improve our lot and our lives. Sadly, this just isn't
so. As a recent report by the Economic Policy Institute
in Washington, D.C., puts it, "Tax Cut[s Are] No Cure for
Middle Class Economic Woes."
Here in Oregon, a separate study localizes some of the
most salient causes and effects of the tax revolt. Titled
"When Prosperity Passes By," this recent ground-breaking
effort is the work of Jeff Thompson and Chuck Sheketoff
at the Oregon Center for Public Policy in Silverton.
Thompson and Sheketoff's work first demonstrates that during
the seemingly glorious economic times of the past decade,
"neither the rising minimum wage nor the stock market boom
has had much impact on middle-income families [here in Oregon]."
While family-income figures in Oregon have increased, they
assert, real hourly wages for Oregon workers were "lower
in 1998 than they had been in 1989." Accounted for in 1998
dollars, Oregon's "real median wage [fell] from $12.01 in
1989 to $11.16."
Thompson and Sheketoff view the kicker as continuing the
unfairness. The average check sent out Friday to the middle
fifth of Oregon taxpayers was all of $53. Meanwhile, the
wealthiest 10 percent got nearly half of all refunds--an
average of $708 apiece. Or, as the Oregon Center for Public
Policy puts it, "[M]iddle-income taxpayers reap little from
across-the-board tax breaks imposed on progressive tax structures."
The poor fare even worse.
After nearly a decade of Oregon's tax revolt, should we
be surprised that the only group in Oregon to increase real
income from 1989 to 1998 are those in the top fifth, who
now account for 57 percent of all personal income reported
here (up from 53 percent 10 years ago)?
Now Bill Sizemore is seeking an initiative to increase
the amount of federal taxes subtracted from income on Oregon
tax returns. As with the kicker, the benefits will be distributed
unevenly. Fully 57 percent of this tax break would go to
Oregon's wealthiest 20 percent.
Meanwhile, Gov. John Kitzhaber is proposing that the kicker
come into play more easily and that some of its proceeds
be set aside for a rainy-day fund. His proposals hardly
represent a bold or meaningful reappraisal of Oregon's increasingly
dated revenue structure.
We keep fiddling with tax policy in the name of self-interest.
In the process, we're doing little to help ourselves and
much to harm Oregon.
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Willamette Week | originally
published November 23,
1999
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