Measure 59
Jeff Alworth
Title: Creates an unlimited deduction for federal income taxes on individual taxpayers' Oregon income-tax returns
Sponsor: Bill Sizemore, Russ Walker
Type: Statutory
What it Does: Allows taxpayers to deduct all federal income taxes paid from their Oregon taxable income; currently, they can only deduct $5,600
What it Costs: Would reduce the general fund $1.3 billion (9%) in the '09-'11 biennium and $2.4 billion (14%) in '11-'13 biennium
Discussion
This is the second time Oregonians have seen this measure. They rejected it in 2000--though the legislature did add a competing measure which raised the cap from $3,000 to $5,000, with adjustments thereafter for inflation. What it effectively does is allows the well-heeled to pay less taxes in Oregon while simultaneously blowing a massive hole in the Oregon budget. It is a pro-rich, anti-government measure that is state of the art for the political thinking, circa 1996. In the post-Katrina, post-bailout era, it looks quaint and amusingly backward. It is nevertheless very dangerous.
In August, Chuck Sheketoff detailed who it benefits:
Households with annual incomes exceeding $83,200 would receive 97 percent of the tax break, leaving just 3 percent of the break to be divided by those with incomes under $83,200....
If you have income of at least $405,000, you are in the richest 1 percent of Oregon taxpayers and as a group you will average $15,000 in tax savings from Measure 59. You and the others in the top income class with incomes averaging $1 million will reap almost half (49 percent) of the tax savings created by Measure 59.
So the only Oregonians who benefit are those who don't need another windfall. On the other hand, the vast majority of Oregonians would suffer if it passes. It would precipitate sharp cuts on spending. After budget-cutting over the past decade, there's no fat left to trim. These billions will come out of the programs in the general fund: education (56%), human services (21%), public safety (16%). Pick your poison. It could be worse for these programs if the state is mandated by Measures 57 or 61 to begin building more prisons.
It goes without saying that only fringe anti-taxers are for this measure and that nearly every other group, from churches and the food bank to business groups and unions, oppose it. Voters should oppose it, too.
Discuss.
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connect with blueoregon
Oct 15, '08
Sizemore: NO Mannix: NO Parks: NO OCA: NO McIntyre: NO Constitutional Amendment: NO Legislative Referral (excluding housecleaning items): NO
This message brought to you by it's simple simplicity.
9:59 a.m.
Oct 15, '08
Your equation has its merits.
Oct 15, '08
According to Jack Bog's algebra, to owe more than $5,600 in federal tax, a married couple would need to have federal taxable income of more than $42,683; a single taxpayer would need federal taxable income above $37,025. If you factor in the standard deduction and personal exemptions (with no dependents), a married couple would need total income of more than $60,583 to benefit from Measure 59; and a single taxpayer would need total income of more than $45,975.
I don't know about you, but I don't call a couple making $61,000 or a single person making $46,000 rich. (I tend to agree with Obama, who draws that line at $250,000.) Granted, Measure 59 would give a cut to everyone at the $61,000 level and above, including the truly well-to-do among us. But at least to some extent, it's a middle-class cut.
Oct 15, '08
Eric Parker's "simple" decision making process may reduce the amount of time he needs to think about electoral decisions, but it's generally not a good idea to ignore the content of political matters. It's not higher level thinking than rejecting Obama because he is "black" or "socialist" or rejecting a measure on the minimum wage because it's supported by the "union bosses."
Oct 15, '08
Yas yas yas, Jack Bogdanski has fallen for Sizemore's latest "tax fairness" dodge...which happens to be the exact same "tax fairness" dodge that he promoted the LAST time he flogged this initiative (in a previous election cycle). Look folks, Sizemore, Mannix, McIntyre, etc. are all just promoting at the state and local level what other GOP operatives, such as Grover Norquist, have been promoting nationally for years. It's the "Starve the Beast" strategy: slash government revenue by any means possible, and then force government to slash services. That's the bottom line, not some abstraction about "tax fairness". They'll spew whatever misleading nonsense they can to get their initiatives passed, but what they NEVER change is their ideological focus: Starve the Beast.
Oct 15, '08
Yas yas yas, Jack Bogdanski has fallen for Sizemore's latest "tax fairness" dodge...which happens to be the exact same "tax fairness" dodge that he promoted the LAST time he flogged this initiative (in a previous election cycle). Look folks, Sizemore, Mannix, McIntyre, etc. are all just promoting at the state and local level what other GOP operatives, such as Grover Norquist, have been promoting nationally for years. It's the "Starve the Beast" strategy: slash government revenue by any means possible, and then force government to slash services. That's the bottom line, not some abstraction about "tax fairness". They'll spew whatever misleading nonsense they can to get their initiatives passed, but what they NEVER change is their ideological focus: Starve the Beast.
Oct 15, '08
The Oregon Center for Public Policy, the Oregon Legislative Revenue Office, and the State Fiscal Estimate Committee all disagree with BoJack's back-of-the-envelope calculations.
Unless you're in the upper bracket of middle-class, you get nothing or next to nothing. Even the upper bracket doesn't get much, especially considering that you'll have to send some of that back to the federal government because of your decreased state tax liability.
And especially considering that you'll have to pay more out of pocket for basic school supplies for your kids, higher tuition rates and college fees, and carry the burden of new taxes. Oh, and your grandma who's being looked after thanks in part to programs that keep seniors in their homes? She'll have to move in, and you get to pay for it.
Oct 15, '08
I recommend a NO vote on Measure 59! It would discriminate against the homeless and endanger a woman's right to choose.
Oct 15, '08
I don't know about BoJack's "back of the envelope calculations," but several weeks ago I noticed the same thing that Meg pointed out above. If you want to verify her numbers, just look at the "1040 Instructions 2007" booklet published by the Internal Revenue Service. For a married couple filing jointly, $5,600 in federal income tax liability happens at $42,550 of taxable income. (Taxable income is gross income less adjustments, exemptions, and standard/itemized deductions.) A head of household (such as a single mother with one or more children) incurs $5,601 in federal tax liability at the $41,050 level. A single filer only needs taxable income of $36,700. That's not exactly an "upper income" person.
The fact that M59 has an unlimited deduction will make it a "No" vote for me. However, if the idea is to put a cap on the deduction so as to not unduly enrich those in the highest tax brackets, the legislature needs to look at the current limit and raise it. It's certainly affecting plenty of middle-income taxpayers.
For example, let's say that a married couple filing a joint return has taxable income of $60,000. With two low-middle income earners, that's not at all unusual. (This might happen with two relatively inexperienced teachers.) Their tax liability would be $8,221. Raising the limit to $10,000 from $5,600 would give this couple an additional $236 to spend. They're not going to buy a new car with it, but I'll bet they wouldn't turn their noses up at it, either. The situation is much worse for single people and heads of households. The H of H incurs $10,181 in tax liability with $60,000 of taxable income. Since this filing status category has lower exemption and standard deduction amounts, it takes less gross income to leave someone with this much taxable income. This person would get $412 of tax relief.
Oct 17, '08
My family makes $95k and believe me we are far from being rich - we have two kids (3 yrs old), mortgage and one car payment. We barely make it through the month with child care expenses that we are not eligible for tax brakes in OR. (If you don't know child care expenses are minimum $1,000 per kid) Me and my husband both work full time with him working second job so that we can pay the mortgage.
I don't see why we should be penalized for hard working and not defaulting on our mortgage.
OR taxes are high as is. I think there is a way to redo the budget and cut unneccessary expenses.
If I pay directly for education in the state, parks and wildlife preserve - I am all up to it - but I am not sure my money will go there ir M59 does not pass.
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