Portland City Council on Wednesday directed the city revenue bureau to look for more potential changes to the arts tax.
City Commissioner Steve Novick has one in mind: He wants to change the very structure of the tax.
Novick described the arts tax as "beyond regressive" when it was a ballot measure in November, because it charges every person above federal poverty levels the same $35, regardless of income. But he mentioned in Wednesday's discussion that he would support the arts tax if the city changed the model to a
flat progressive tax.
"Since the voters approved the last one," Novick tells WW, "I would just send it [back] out to the voters."
Novick is pushing to make the art tax a tax of 1.5 percent of each person's Oregon progressive personal income tax liability.
"It would be tied to the Oregon income tax," Novick says, "which is somewhat progressive."
In other words, if a taxpayer with an annual taxable income of $130,000 owes the state $11,343, she would owe Portland $170 for the arts tax. But if that taxpayer had an annual taxable income of $24,000 and owes Oregon $1,774, she would owe the city just $29 for the arts tax.
UPDATE, 1:32 pm: After calling WW to clarify the structure of the tax, Novick points out that the language—a flat tax on top of a progressive tax—is confusing. "How about 'piggyback tax?'" he suggests. Which sounds like an accurate term.
Novick calculates that this system would raise the same amount of money for arts teachers and arts organizations, while costing poor people less.
He says he suggested a progressive tax to the Creative Arts Network when it was crafting the tax last year. "I think I gave them that specific concept," he says, "but I wouldn't swear to it."
A flat arts tax could circumvent the lawsuit filed this month by Lewis & Clark Law School professor and blogger Jack Bogdanski, alleging that the arts tax is an unconstitutional head tax.
City Council is already planning to raise the minimum annual income on the arts tax to $1,000. But every tweak comes with a cost.
City revenue director Thomas Lannom told City Council on Wednesday that changing the rules of the arts tax means another year's delay on getting included by third-party tax preparation software providers like TurboTax.
The city had created revenue projections expecting the arts tax would be included in TurboTax software by 2014. Now Lannom says the arts tax won't be part of online tax preparation until 2015.