Measure 41 is Fool's Gold

Chuck Sheketoff

Bill Sizemore's Measure 41 has a confusing ballot title and its out-of-state proponents, Dick Armey's FreedomWorks, call it a "family tax cut."

At the Oregon Center for Public Policy (OCPP), we've concluded that Measure 41 offers fool’s gold to Oregonians. We've published a new issue brief titled Fool's Gold: How Measure 41 would leave seniors and others behind.

Fool's Gold explains the measure and how it would make Oregon’s tax system more complicated and cause cuts in public services that Oregonians rely upon, such as schools, the Oregon Health Plan, senior assistance programs, and public safety initiatives.

Perhaps most important to voters, Fool's Gold documents how Measure 41 picks winners and losers among Oregon families:

Measure 41 leaves most elderly Oregonians out and favors richer elderly Oregonians:

Measure 41 raises federal taxes and reduces kicker refunds:

Read Fool's Gold: How Measure 41 would leave seniors and others behind at www.ocpp.org.

  • steve s (unverified)
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    Chuck, You are skewing the average tax decreases by including in groups those who pay little or no taxes. as you did with this """Low- to middle-income taxpayers on average would receive $135 a year off their taxes, and almost one-third of those taxpayers would not receive any tax reduction.""" and this ""Almost seven out of ten elderly Oregonians are low- and middle-income elderly Oregonians and their average tax cut would be just $31 a year (less than $3 a month)"""

    It appears to this conservative that you deliberately included those who pay no taxes in your groups so you could show as low a tax reduction as possible?

    Is it not true that if 59% of elderly and 49% of low-income Oregonians receive no tax cut from M41 it's because they pay little or no taxes to be cut.

    Is it not logical for tax cuts to be given to those who pay taxes?

    You have gone to great lengths to create your fools gold brief to mislead the public with average numbers you have deliberately skewed.

  • ross smith (unverified)
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    As a retired CPA I have analyzed M-41 in great detail using numbers from the Legislative Revenue Office, and have determined that the average saving PER DEDUCTION are about $140. An Oregon family with four deductions and family income from $30,000 to $200,000 would receive a total benefit of from $484 to $604 next year. Also it is important to note that M-41 is highly progressive, with the average percentage of saving to taxable earning being much higher for lower income taxpayers earning at least $10,000, declining from 24.5 percent to less than 1 percent at $200,000 -- so this is definitely not a tax break for the wealthy. The first year cost to the state would be only about $204 million out of over $5 Billion expected income tax revenue, so it won't break the bank either. And it has the added advantage of conforming Oregon deductions to federal, thereby making tax preparation easier. You have to love paying income taxes to not vote "yes" on M-41.

  • Mick (unverified)
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    Out-of-state proponents? Nice red herring!

  • Eric (unverified)
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    If it is that confusing, just vote NO. In fact, vote NO on everything else too.

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    what kind of crazy-ass "typical" income range is 30k-200k? $200k in household income represents the top 5% of all AGI non-corporate filings in the state in 2005...and it's damn close to 1% (which starts at 273K). Eighty percent of the state--four out of every five filers--reports adjusted income of 65K or less.

    and ross--I suspect those figures don't include the increase in federal taxes due to M41's passage?

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    ps: state tax stats for tax year 2004 are here: http://www.oregon.gov/DOR/STATS/docs/101_406_05/101-406-06.pdf

  • LT (unverified)
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    Ross, Why should single individuals, or those with a family income under $30,000 vote for this?

    An Oregon family with four deductions and family income from $30,000 to $200,000

    Do the sponsors not want to talk about Oregonians who make less than $30,000?

    And, as one should ask about all tax changes, why is it not "a shift not a gift" as certain famous commentators have told us to look for in all tax changes?

    A tax break takes money out of the general fund. That requires either budget cuts or offsetting tax increases elsewhere (corporate taxes, anyone?).

    So, do the sponsors propose what should be cut? Or just say "leave that to the legislature"?

    Freedomworks IS an out of state group started by Dick Armey. Don McIntire and Bill Sizemore are local. Freedomworks (aka CSE) is a national group.

  • No No No (unverified)
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    Why should we argue over this? This measure is the result of Sizemore. That in itself garantees a no vote. No no no no no! Any Sizemore measure gets a no vote.

  • Matt G (unverified)
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    In response to the comments of Steve S, Up to a point, it's absolutely "logical for tax cuts to be given to those who pay taxes." But "paying taxes" and "paying income taxes" are two very different things.

    The Oregon-based (and DC-based!) folks pushing this tax cut are hardly the first people to intentionally blur this important distinction-- the Bush administration has elevated it to an art form in the past six years-- but that doesn't make it any less wrong.

    Your assertion that OCPP has done wrong by including all low-income Oregonians (including those who get no tax cut) in its average-tax-cut calculations makes a lot less sense once you get past the "paying taxes" red herring. If 20% of Oregonians (and more than half of all seniors!) are getting nothing at all from this plan, any summary measure of the plan's impact ought to reflect their situation.

    Moreover, the detailed statistics in the OCPP report make the distinction between the average tax cut for all Oregonians and the average for those getting a cut-- which is a helluva lot more than one can say for the Freedomworks guys who have inexplicably asserted that the "typical" Oregonian will see a "several hundred dollar" tax cut from this plan. (See http://www.freedomworks.org/newsroom/press_template.php?press_id=1874). So if you (incorrectly) think the best numbers to use are the average tax cuts for those Oregonians getting a tax cut, you don't need green eyeshades to figure it out-- it's in the OCPP report. This kind of transparency in reporting tax benefits is exactly what tax policy debates need more of.

  • ross smith (unverified)
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    In answer to question raised, for space saving I included in my response the more common spectrum of savings for Oregon families paying the most income tax -- obviously benefits at the lower end of earners are less due to their not paying so much in taxes, but they are significant nonetheless: a typical four-deduction family with joint earnings of $10 to $20,000 would save $239; and earning $20 to $30,000 would save $383. Yes, there would be a total of $40 million in more total federal taxes to pay due due to smaller state tax payments, which would be roughly 10 percent of the total state tax saving first year -- but I was giving only state savings, again for brevity. Why should progressives support M-41? -- because it is a very progressive measure designed to provide some income tax relief for all Oregonian income taxpayers. But as I said if you don't think Oregonians need any income tax relief M-41 is not designed for you.

  • LT (unverified)
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    Why should progressives support M-41? -- because it is a very progressive measure designed to provide some income tax relief for all Oregonian income taxpayers.

    For this to be true, every Oregonian who files a tax return, every Oregonian who has money withheld from their paycheck, will get "some income tax relief".

    Where is the evidence that will happen? Or will it turn out to mean "every Oregonian who sent an check for taxes owed to the Oregon Dept. of Revenue will get income tax relief" ?

    Which is it? Time to be honest about that. If the store retail clerk (or other such employee) who has money withheld out of each paycheck and files a tax return at the beginning of the year earns less than the amount withheld and thus gets a refund, are they not a "taxpayer"?

    There are those who debate tax issues who say the only "taxpayers" are those whose withholding is less than their tax liability---that the true measure of being a "taxpayer" is mailing that check to the OR Dept. of Revenue.

    So inform all of us who are (or have been, or know) people who file tax returns but get refunds if we are truly "taxpayers". Or if only those who write a check to the OR. Dept. of Revenue qualify under that category.

    Some of us are tired of the rhetoric that is either sloppy, spin, or propaganda.

  • Denise Garrett (unverified)
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    Hold up, folks! Where's the reality in debating how much any one indiviual or family might pay in reduced taxes when we are being asked to vote a mandate for fanatical underfunding of education, senior services, health care, and public safety?

    I'm not willing to shift the debate to nitpicking dollar amounts that for most taxpayers mean little to nothing but in terms of cuts for services and education adds up to $641 million in 2007-2009 alone! Measures 41 and 48 are too extreme!

    We expect and pay for the services and infrastucture that offer our best hope for civil society - can we afford to do less? I think not! We will all benefit from voting a resounding NO on measures 41 and 48.

  • yak (unverified)
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    I knew I could count on Blue Oregon for some real discussion.

    I read Chuck's piece today and had nary the same reaction as the first two posters. I thought the writing was very sloppy. It won't convince anyone who is not already convinced, of that much I am sure. It may be you could delve into the data as Matt G suggests, but I don't have time for data-diving.

    What I do know is that I am decidedly on the fence about this measure. And before Denise can chime in by trying to blanket associate 41 with 48 (a poor tactic in my opinion if you truley respect people's intelligence), I have already made up my mind on 48. No.

    As for 41. Someone PLEASE correct me if I am mistaken, but surely "taxpayers" include those who get a refund. I mean, quite simply, they PAID taxes. Just more than their actual liability therefore causing a refund. If these taxpayers (no need for "quotes") are not being counted, then the data is all hopelessly absurd in any case.

    No one has refuted what appears to be the sound conclusion of Ross: "a typical four-deduction family with joint earnings of $10 to $20,000 would save $239; and earning $20 to $30,000 would save $383."

    The question then, is "Does the tax savings benefit to those that receive the tax cut do more good than the harm cuts due to a budget shortfall would do?" It is a classic market argument regurgitated yet again.

    I will make one conclusion here and it is that ideology will determine the response of 9 out of 10 people. On the Internet or off. Whether they have an ideology or not and whether they know what an ideology is. I think Clinton has recently spoken to this effect. Curious, in my opinion. But then George W. Bush apparently can speak Spanish, so there you have it.

    In the end, I think I'll be checking back here to learn more about M41. I knew before it even made the ballot that I would find the measure and its conversation interesting. In that way it is like the measure about term limits, an inherently liberal argument (when compared to modern american conservatisim) that has been disgarded by the Left and its short term memory.

    And this argument that it comes from out of state is not very good either. So what? How do you think civil rights came to the South? Blanket statements that the only thing that smells worse than outsiders is their money confuse the end goal of democrary and make issue politics out of everything.

    I tend to vote against measures by default. Of course this doesn't always work, but the point is, my default position on this one is - I save $383? (Using Ross's numbers) I'm voting for it. Heck, maybe it will even allow me to increase my giving budget beyond $250. You know what, I might just donate half my savings to Meals on Wheels.

  • LT (unverified)
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    Can't remember off the top of my head if it was Sizemore or Norquist or Bush (has been a long day) but there were those of the anti-tax persuasion saying not that long ago that "taxpayers" didn't count those who got an income tax refund.

    Look at all the folks who have never qualified for Bush tax cuts. I think one has to have a certain income (above the income of those who get refunds) before qualifying.

    And as the saying goes, if it is "your money" it is also your state police, your road repair, your safety net for people who can't afford food, housing, medical care, etc. Not to mention other education and public safety issues.

    Money can only be spent once. If the people who want tax cuts are willing to say "this money should go to tax cuts instead of being spent on..." that is fine. That is not what most of them say. And I have no patience with the anti-taxers who do that for a living. They should go out in the real world and get real jobs (hard work, polite to others, attention to detail) rather than running ballot measures or working in lobbying groups.

  • yak (unverified)
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    "Look at all the folks who have never qualified for Bush tax cuts. I think one has to have a certain income (above the income of those who get refunds) before qualifying."

    This is totally preposterous. You are REALLY missing the point. My INCOME has NOTHING TO DO WITH WHETHER I GET A REFUND - that is all about withholdings and payments during the calendar year. As far as I know, my income could be $150,000 a year and I can still overpay my liability and still get a refund. Someone please correct me, but I believe the statements by LT are just flat out INCORRECT.

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