Steve, please expand on and explain the other change in corporate taxes. The change that taxes corporate revenue rather than net income.

Happy new year, but I think your questions obscure more than they enlighten. Let's take your third question, and pose the case of an Oregon C corporation with $11 million of revenue, but losing money. Under the legislature's new minimum tax, that business would pay a $15,000 minimum tax, presumably funded by its investors (since the company is losing money) or by cutting expenses somewhere else, like payroll. That will not be helpful in getting the economy of this state back on track. Or take your fourth question. Yes, the couple making $260,000 would pay $180 more, but they would also paying the highest total state income tax rate in the country. On your first question, I think we all care about services. But unless the taxpayers are willing to fund state government at whatever level the legislature thinks is right (which I don't think they are), the legislature is going to have to base budget decisions on the resources it has, and prioritize and fund that which is most important and not fund that which is not, just like every family and business in this state has to make the same choices. I think many of us would be willing to have a state-wide discussion about broader changes in our overall tax structure, to make it less dependent on the income tax, which is a disincentive to economic activity and very cyclical. Unfortunately, the legislature's effort would take things in exactly the wrong direction. Bob Wiggins

Bob, about this: " the legislature is going to have to base budget decisions on the resources it has, and prioritize and fund that which is most important and not fund that which is not"

"The legislature" does not make those decisions, Ways and Means does. The only Republican alternative to the budget was compiled without any involvement by members of Ways and Means.

If you have any ideas about priorities of "what is most important", did you communicate with anyone on W & M?

I had a friend on a W & M subcommittee who seemed to think the people who talked in June about what they "should have done" was a lot larger than the number of people who actually made the effort to talk to anyone on W & M.

Maybe it is easier to snipe from the outside than to actually get involved in the process?

Here is something to ponder:

Everyone talks about Measures 28 and 30, few remember Measure 29. Except this author remembers vividly.

Agree or disagree, it is something maybe even Gov. and legislative candidates should discuss.

http://www.oregonlive.com/opinion/index.ssf/2009/09/can_we_learn_from_measure_29.html

Yes, the couple making $260,000 would pay $180 more, but they would also paying the highest total state income tax rate in the country.

And the lowest sales tax (0%). And pretty low property taxes given the limits of Measures 5, 47, and 50. So what's your point about tax rates, anyway? Regardless of whether it's the highest or lowest tax rate in the country, this couple -- who is in the top 1% of income earners -- will pay an additional $180. One hundred and eighty dollars. To keep the school year from shrinking even further.

the legislature is going to have to base budget decisions on the resources it has, and prioritize and fund that which is most important and not fund that which is not

Why? What is so sacred about our current tax rates? Why do you believe those are the "right" tax rates, and the higher ones are "wrong"? There is nothing objectively right or wrong about any given tax rate. Public policy dictates that you set a tax rate at the level necessary to fund the services desired by the public. We know that the public doesn't want a shorter school year, and they don't want to kick people off the Oregon Health Plan, and they don't want to fire state troopers or release prisoners. The only reason they don't always support higher taxes is because Republicans lie and tell them they can have all those things with lower taxes. It's bullshit, and you know it.

just like every family and business in this state has to make the same choices.

I am so tired of this obviously false canard. First, most families always try to earn more income when things get tight (the state equivalent of raising taxes), by working extra shifts, getting a second job, or looking for a higher paying job. They also stop giving money to charity (the state equivalent of eliminating tax deductions and credits). They also dip into savings (the state equivalent of spending reserves). They also borrow on their credit cards or their houses, sometimes to pay for job training or education (the state equivalent of issuing bonds for capital projects to increase efficiency). Finally, they cut unnecessary expenses (the state equivalent of cutting programs -- which Oregon did a TON of this last session). They do all of this before they stop feeding one of their kids (the state equivalent of making the cuts that you are proposing).

So please, stop with the bullshit about government needing to act like every family and business -- they already are.

Steve,

You are an intelligent human being, and I think you make good arguments, however, I believe none of us is considering the real issue at hand: what's fair and what isn't.

There's a philosophical difference related to fairness between liberals and conservatives...should we rob Peter to Pay Paul? Some would say that Peter is stingy and should share with others. Who's right, who's wrong?

I fit right squarely in the middle-class family category. I own a 1,500sf home and have two kids. For me, these bills negatively affect my wife and I because the measures would reduce her ability to write off business expenses on our state income taxes. As a contract employee with no health benefits offered (my wife has purchased private insurance since mine is too expensive for a family), every dollar that goes out for business expenses is precious to us. So when the state takes away our ability to recoup some of those costs, that's frustrating.

I have to be honest and say that I don't really know what impacts raising the corporate minimum would have - I don't know enough about it. But I do know enough about the other measure to be against it.

Oregon is a business friendly state. In fact it is so business friendly, that it borders on uncompetitive. So, the only way to make it more competitive is to make it less business friendly.

See, it's OK to drive the remaining businesses out of the state because we will spend the money on schools. Then, when all those smart students graduate, all the businesses will come back to the state to employ the students that [___] paid for. Then, we can raise taxes to pay for better schools, and so on ...

Why does this sound like a rat farm / cat farm scheme?

Garage Wine...

If we have the 48th or 49th LOWEST corporate taxes before and after these measures, how is that going to make us less competitive? Clearly taxes are not the reason Oregon has struggled with luring big business.

As a small business owner in the Willamette Valley, I have absolutely no problem with the taxes in Oregon. I do have a HUGE problem with all the forms, permits, fees, check-ins, reports and general paperwork the state requires of me. It's beyond onerous. Every agency I deal with has their own form for the same info. Filed at a different time of year. And gathered/listed in a different way.

But don't let anyone convince you that corporate taxes are really a burden in Oregon, because they are not.

There are a lot of comments here, but several by Steve deserve response or correction.

First, Steve, under Oregon's income tax (and everyone else's) individuals who conduct business as sole proprietors or as owners of S corporations, partnerships or LLCs are taxed on their net business income, not their gross income. Individuals are entitled to deduct business expenses in computing their Oregon income just the same as corporations. Your statement to the contrary is not correct.

Second, you note that Washington's gross receipts tax is higher than the new gross receipts-based minimum tax that the legislature approved in Oregon. That is true (at least at this point), but you fail to note that Washington does not have a corporate or personal income tax at all. If these tax increases survive, Oregon will have a high corporate income tax AND a gross receipts tax.

Finally, you assert that Oregon's business taxes, even after the legislature's hikes, are among the lowest in the country. I have looked at the study that you and Chuck use to support this contention, and I have some doubts about it. But, even apart from that, the biggest issue under the study that makes Oregon look like it has low business taxes is that Oregon has no sales tax. A sales tax is less cyclical than an income tax (though not completely non-cyclical), less of a disincentive to production and investment than an income tax, and most states have taken the course of a reasonable sales tax and a reasonable income tax rate, not the lop-sided approach Oregon takes, which the legislature's actions will only make more lopsided. It isn't just the overall amount of taxes that affect economic activity and growth--it's the type of taxes.

Bob Wiggins

Hey Steve - I am just back from Fasting on Bear Butte in SD. Did you know this is a 13 Year Locust Plague year? Yah! They are carnivorous little bastards that bite. And they ATE my eagle feather!

So: riffing on that theme of yours, does this count ok for the plague part of the thing?

So: I signed the pledge, gave you all the personal contact information required to become a signator. BUT: your organization does NOT have permission to start spamming me by telephone, mail or internet. You have my pledge, I'm good for my word. You do not have permission to pester me about your interests, passions, action agenda.

So if that happens, I'll be sure you hear about it here. Hope you are kind enough, Steve, to remind Defend Oregon of basic netiquette and how, if you burn someone with spam without asking permission, that becomes an evangelistic, hard "no".

has anybody ever thought about politely asking those families who make over $250k? you attract more bees with honey then vinegar.

"The legislature" does not make those decisions, Ways and Means does. The only Republican alternative to the budget was compiled without any involvement by members of Ways and Means.

If you have any ideas about priorities of "what is most important", did you communicate with anyone on W & M?

Wow Liz! You made some pretty broad statements here. First, yes, Ways and Means writes the budget but all 90 members vote on it. If something is not going to get the support of a majority it doesn't go in. Members can always vote no.

Also, I am sure Rep. Richardson, who helped roll out the Republican Budget Plan, would be very interested to know that you threw him off Ways and Means. I thought only the Speaker could do that...

Finally, I am not surprised that very few weighed in with Ways and Means subcommittees. I heard many subcommittee members complain that up through May all the committees were doing was hearing the Governor's recommended budget. That budget was out of date about 15 minutes after in came off the press in December of 2008. It would have been a waste of time to take time off work to come down to the Capitol to talk about a budget that had little bearing on reality at that point.

Nice try with the broad brush strokes though!

Was impressed with Richardson's hard work on Ways and Means. If he was on Back to Basics, I was not aware of that--what was the bill number?

Well, darn it. SPAMMED immediately. I did not checkmark any of the invitations to receive mailings from them. I did not say yes to anything that would invite them to contact me by any means.

Minutes later I receive the following:

"Thank you for taking the first step towards a stronger Oregon by signing the Defend Oregon Pledge. The campaign to increase fairness in Oregon's tax system is building and more people are signing up everyday to defend Oregon's future.

The Defend Oregon coalition is bringing together organizations and individuals from all over the state. Together we are working to protect vital services like education and healthcare, and fighting for a tax system that is fairer for all Oregon families.

Oregon needs your help. While special interests spend money to maintain the status quo, it is more important than ever for us to join together in fighting for better education, safer neighborhoods, basic human services and tax fairness.

Join us at our upcoming event: When: Saturday October 3 at 10 am What: Neighborhood Walk: Right now, most people don’t know that two-thirds of corporations pay just $10 a year in Oregon’s corporate minimum income tax. Let’s get out there and talk to our neighbors about voting to protect our schools and making our tax system more fair for all Oregon families. Where: Machinist District Lodge 24, 3645 SE 32nd Avenue, Portland, OR 97202. RSVP to: Mike Grigsby, phone: (503) 234-0444, email: [email protected], or sign up online at http://defendoregon.org/volunteer.php

If you are outside the Portland area and want to get involved in events in your community, contact us at [email protected]

Are you ready to volunteer? Sign up for the neighborhood walk, the Plus 10 challenge, and many other community activities! Contact us at [email protected]

Want to send out the pledge to your friends and family? An electronic copy of the Defend Oregon Pledge can be found here: www.defendoregon.org/getinvolved.html.

By voting Yes on the tax measures in January, we can protect vital services and keep the burden from being shifted to the middle-class. As a part of the Defend Oregon Coalition, you play a vital role in making Oregon’s tax system more fair for all Oregon families.

Sincerely, The Defend Oregon Coalition"

Let's see what happens next. Hopefully this is the extent of the unasked-for useage of my contacts.

I signed a pledge to vote, hoping they would use that in a political show and tell on the numbers. I would like my name to be counted among those.

I did NOT give them permission to contact me now or in the future. I know where to find them.

What do you think? Will they leave me alone? I'm a curmudgeon you know.

Miles, every dollar of state taxation is a dollar that is taken from productive private economic activity. Some methods of taxation are relatively less destructive to private economic activity (for example excise taxes on activities we want to discourage) and some are relatively more destructive (income-based taxes). The balance is to fund the governmental services most important to the public, but to do it in a way that minimizes the negative impact on private economic activity.

You write that: "Public policy dictates that you set a tax rate at the level necessary to fund the services desired by the public." That prescription could justify taxing 100% of all private economic activity (which of course ultimately would eliminate the tax base). Instead, I would expect the legislature to do two things, which in my opinion it failed to do.

First, maintain an overall tax structure that is as harmless to investment and economic growth as possible. Oregon's heavy reliance on the income tax is the opposite of this, and the legislature made things much worse with their actions last session. And the addition of the new gross receipts-based minimum tax will make matters even worse, particularly in the case of investor-funded start-ups. (I agree it will be hard to change Oregon's overall tax structure to something more rational and in line with other states, but if we can't, these frequent crises will continue to get worse.)

Second, ensure that the state provides the most services it can to the public at the lowest possible cost. In my businesses over the last 18 months, we have had to lay off between 10 and 20 percent of our work force, to remain in business and maintain jobs for the rest of the employees. I can assure you that this was gut-wrenching for everyone involved. The remaining employees in a number of cases took voluntary salary reductions as well. Has anything like this happened with state employees? If so it should be publicized more, because it would help persuade people that the state has done everything it reasonably can to provide the most services to the public at the lowest possible cost.

You are right that there is no magical level of taxation and services that is provably right. There has to be some form of spending discipline though. In my view, if the process started at 2008's level of expenditures, and went forward from there adjusting only for inflation and population growth, that might be a good starting point. (Sure I'd like it lower, but you'd like it higher, so at least it's a starting point.) The advantage of this is that at least everyone would have an agreed-upon starting point. Then, I'd scrap the current tax structure in favor of something much more in line with the states that have fared best during the last few economic crises. If tax revenues under the new system exceeded the spending limit, that excess would be socked away. If tax revenues were less, the legislature could draw on reserves, but could not raise tax rates. Beyond that, I would expect the legislature to manage costs as if they were spending their own money, and prioritize programs such that things most important to the public are adequately funded, and those that are less important are not.

You may say I'm a dreamer, but I'm not the only one ...

Bob Wiggins

Mr. Novick,

Could you kindly explain under what circumstances a corporation is required to pay the $10 min. currently.

So, Bob, what's your Plan B when your hypothetical sales tax gets repealed by voters... again?

"Has anything like this happened with state employees?"

There have been hiring freezes, layoffs, losses of positions through attrition throughout the state, many in programs that have met increased demand because of the recession. While state revenue fell 19%, demand for unemployment, enrollment in the Oregon Health Plan and emergency cash assistance rose between 20 and 25%. The legislature made 2 billion in cuts in addition to adjusting the revenue by raising the corporate minimum and the marginal rate for higher income individuals and families.

The $10 corporate minimum was a free ride for a lot of businesses and it's about time it was raised. The onus on startups will increase, but not by much. The trade off for business is that Oregon will be more competitive in things that attract and retain a good well-educated workforce: good schools, good services, safe and vibrant communities.

Have to admit, as a tiny S-Corp, I have to wonder if the state will make it useless for me to exist at all. But that is because this is an entity for my writing and other consulty activities, and is not a steady income producing entity. I'm thinking like small potatoes here, afraid the state will not realize that I'm not some entity that is making a steady cash flow and SHOULD contribute a little more. I suppose that, given my membership in a particular sector of society whose reality is not well-understood (and meets bafflement or lack of interest when an effort is made to educate) as well as having worked most of my professional life with the desperately forgotten, I'm possibly even metabolically unable to trust those who make the rules to pay attention to the fine points of those who must follow them!

"So, Bob." Great name.

If the individual and corporate income tax increases are rejected in January (which I hope they are), the state will be faced with a budgetary shortfall. I would like to think the leadership of this state is capable of rising to the occasion.

There are reasonable people on both sides of the political spectrum who agree that state services are important (and I think there is even general agreement as to which services are the most important), but that the growth of state expenditures is now on an unsustainable course and that a tax system based so heavily on the income tax is both over-cyclical and harmful to economic growth. And private sector economic growth and wealth-creation in this state is ultimately essential to growth in tax revenues.

If the cooler heads of both parties, the business community and other interested parties could agree on a plan that resolved (or at least eased) the current crisis and (1) provided assurance that the rate of growth of state expenditures would be capped (and if that means that certain expenditures that have been placed on auto-pilot growth by the initiative process or otherwise need to be taken off auto-pilot, let's put that on the table), and (2) adopted a tax structure in line with the mainstream of states, with reasonable assurances that rates under the new system would not be increased, and then presented it with a unified voice to the voters, I think there is so much dissatisfaction with the current situation, it could survive a vote of the people. All states are hurting now, but a number of them are doing a lot better than we are. This is not the most difficult challenge ever faced by mankind.

What I do know is that the solution is not to take Oregon even further from a reasonable system by giving us the highest personal income tax rate in the country, a very high corporate tax rate, and a new gross receipts tax that will harm new innovation and growth by making it even harder to get an investor-funded start-up off the ground here. Bob Wiggins

Anybody here drinking the same Kool-Aid as Bob Wiggins?

Just to provide a response to these talking points, our system would be fine if we had a large enough Rainy Day Fund to tide us over the rough spots; the income tax produces pretty well in the good periods. The main problem that needs fixing, contrary to Bob, is that we don't have high enough taxes on the wealthy and profitable. Oregon has the 47th lowest corporate tax burden of all states, and the tax measures will take us only to 46th. The income tax rate may be higher than most, but then again corporations don't have to collect OR PAY sales taxes, which more than makes up for that.

On the individual side, the wealthiest 1% of taxpayers still pay less than the poorest 20% of state and local taxes, as a percentage of income. The OVERALL SYSTEM is regressive therefore, even though the income tax rates seem to be progressive.

These people will seize on any piece of misleading "data" and repeat it ad infinitum to try to convince the swing voter. Like the "job killer" claim. The tax measures will actually create and preserve tens of thousands of jobs in Oregon, not kill them. It would be funny if not so tragic: AOI and their out-of-state funders have persuaded the small and Oregon-based business community to oppose the taxes, even though they will BENEFIT from them, in the form of a more robust economy that will support demand for their offerings.

Clarification of garbled sentence: the wealthiest 1% of taxpayers pay a smaller percentage of their income in state and local taxes than do anyone else, including the poorest 20%

"If the individual and corporate income tax increases are rejected in January (which I hope they are), the state will be faced with a budgetary shortfall. I would like to think the leadership of this state is capable of rising to the occasion. "

"Capable of rising to the occasion"? Sounds like pure Mannix. If his "tough on crime no new taxes" mantra (not much substance behind it) had been popular among voters, he would have been elected Gov. in 2002.

Before the measures can be on the ballot to be voted on in January, they must first qualify for the ballot. Unless you have inside information about how many signatures have already been collected, maybe it is wise to see how many signatures are turned in on Friday before assuming they will be on the ballot.

"These measures only raise revenue from corporations and the rich."

Who employ us?

You're going to be on the losing side of history ... again.

Geoff Ludt

"You're going to be on the losing side of history ... again."

Do you mean, like, actual history... or fictional history in an Ayn Rand book?

(I love it when conservatives confuse random grandiose statements with cogent arguments.)

How do you raise taxes on an entity with no taxable income as defined by the IRS and ODOR?

FAIRNESS:without irregularity or unevenness

How can you possibly talk about tax fairness when you desire to apply the tax code in an uneven manner. If one taxable entity pays taxes on no taxable income, then all entities should pay taxes on no taxable income.

mp: as a tiny S-Corp with project-driven earnings as a sideline, I sure do like your assessment of fairness...

Well "Fair and Balanced", I don't think I've been serving any Kool-Aid here.

1. In response to Steve's post, I observed that under the legislature's plan, unprofitable C corporations would pay a gross receipts-based minimum tax, and I referred to an example of an unprofitable C corporation with $11 million of sales that would be subject to $15,000 of tax. That's from the legislation iteslf; anyone can check.

2. Also in response to Steve, I observed that individuals in Oregon would under the bills be paying income tax at the highest marginal rate in the country. Again, anyone can confirm that.

3. Steve made an assertion that under the income tax, individuals are taxed on gross income, and that that was unfair as compared to the treatment corporations receive. I pointed out that individuals conducting business as sole proprietors, or that own S corporations or other pass-through entities actually are entitled to deduct business expenses, just like C cporporations. This is also a fact that anyone can easily confirm.

4. I expressed some questions about the study that proponents of the new taxes rely on to assert that Oregon's business taxes are so low. I encourage everyone to look at the study and decide for yourself. But even if it is right, the main takeaway is that the lack of a sales tax is what makes Oregon so out of the mainstream, which is a point I happen to agree with.

5. Beyond that, I expressed opinions that the highest marginal income tax rate in the country would be a disincentive to investment in Oregon, that the gross receipts-based minimum tax would adversely affect start-up activity in the state and, in response to a question as to what I would suggest, I set forth an overall tax structure based on having Oregon more in the mainstream of what other states are doing. These are only my opinions, but as I have actually used my real name on these posts, anyone who is interested is free to look up who I am and decide for themselves whether or not the opinions are worthy of consideration.

6. In your post, you expressed an opinion that the tax increases would actually create and preserve tens of thousands of jobs in Oregon. That is obviously inconsistent with the economic studies that the proponents of the referenda refer to, which suggest that the tax increases will cause job losses. I'm not a huge fan of economic projections, but I'd be interested in any support you have as to how the tax increases will crease and preserve jobs.

(No offense intended to the makers of Kool Aid.)

Bob Wiggins

Why should corporations pay less taxes than me? Me and every Oregon taxpayer are subsidizing Nike, Walmart, etc. How is this good public policy.

Another point: taxing these out of state corporations means that the money goes to the policeman, fireman or nurse whose jobs are funded out of these tax dollars. These individuals will spend the money instate unlike the shareholders of Walmart, etc.

Bob, I was at a meeting today where someone joked that he didn't use the term "marginal tax rate" because so few people understand it.

So, about this, "5. Beyond that, I expressed opinions that the highest marginal income tax rate in the country would be a disincentive to investment in Oregon, "

If there were a tax passed where people earning over $100,000 would pay higher tax rate on the amount over that amount, and someone earns $100,100 and that means they pay the same rate as before on the $100,000 and the higher rate on the $100 over the hundred thousand dollars, does that mean the tax rate on the $100 is the "marginal tax rate"?

Or is that a stupid question because anyone reading a blog knows that information already?

Good communication means defining terms that not everyone in the audience may know.

There are news anchors who stop anyone who uses jargon like CBO (makes the statement or requires the guest to state, for example, that CBO stands for Cong. Budget Office). There have been comm. and subcomm. chairs in the Oregon Capitol who have raised money for charity by requiring every witness who uses initials like that without explanation to put a little money in a jar.

Beyond that there is the other point--proof vs. faith.

I know it is an article of faith that higher taxes=lower investment.

But are taxes really the only factor? As I understand it, the proposed Oregon business taxes would make Oregon the 48th in business taxes and Conn. 49th. Assuming that is true, if a business with markets on the W. Coast and in the Rocky Mountain time zone were considering investing in a location, would they really invest in Conn. because tax rates are more important than proximity to markets?

And does this debate really matter to someone contemplating starting a small business?

Out in the real world there are people more preoccupied with work and family (someone soon to be starting a new job, parents of small children, etc.)

And someone previously unemployed getting a public sector (or nonprofit sector) job even part time is good news for that person and those who know that person, regardless of what economic studies show. Or do only private sector jobs count as "jobs created" because society doesn't really need public safety employees, teachers, college professors, or any sort of city, county and state workers because every study has shown that there is always equal or better quality every time a private company has taken over a public service?

I think many people disagree with that statement.

Finally, Bob, you might convince policy wonks, political junkies, etc. with your comment. But most voters don't fall in that category and are likely to see your language as arcane--known or knowable only to the initiate.

Hi LT,

As your post observes, I am not a professional communicator, just a person who has lived in Oregon all my life and I feel strongly that the two tax increase bills are very bad for the state.

Your example is exactly right as to the meaning of the "marginal" tax rates. It is not a stupid question at all. It's surprising how many people don't understand the difference, and its even more surprising how many people don't understand the difference between "revenue" or "sales" and "profit" or "earnings" (including most of the business reporters around here.)

Taxes are certainly not the only factor one takes into account in deciding where to locate a business or where to live as an individual, but they are a factor. Take a ride down the Columbia River and look at all the beautiful houses along the northern bank of the river. Many of those are owned by former residents of Oregon, who moved there as a result of Oregon's high personal income tax and lack of a capital gains deduction. That's millions of dollars of tax revenue the state lost, because of its high rates. And the legislature wants to make them higher.

As a practical matter, I'm probably not going to convince a lot of followers of Blue Oregon that these tax increases were very bad public policy. But if I can convince a few of you to at least think some more about the issue, it's probably worth missing a few minutes of the Cowboys-Giants game to try. I haven't called anyone any names and I haven't made any personal attacks. I appreciate that Blue Oregon lets people with differing viewpoints post their comments and defend their positions.

Bob Wiggins

@Dan: Why should corporations pay less taxes than me? Me and every Oregon taxpayer are subsidizing Nike, Walmart, etc. How is this good public policy. Why should your neighbor pay less taxes than you? Why should YOU pay less taxes than ME? Why should I be subsidizing YOU?

Bob--thank you for your intelligent comment. I have always groaned when someone talked about "marginal tax rates" as if everyone understands them. Talking above people's heads is lousy PR, and as a former state rep. once said, politics is more like sales than many people want to admit.

As someone who has spent a lot of years in sales (retail, product demonstration) I know that there are factors in any buying decision. If someone wants an easy care garment which can be thrown in the washer if it gets dirty (parents of kids, people who work with kids or otherwise may need to wash garments regularly, etc.), they are not going to buy a garment that says "hand wash only". Preaching at them that it is the latest fashion and everyone should own one won't change that fact. Too many people in politics forget that basic lesson.

I'm a political grandchild and I have been around Oregon politics for over 3 decades. My experience is that "here is my proposal and I will be glad to answer any questions" beats "good people agree with us" every day of the week. I've been yelled at by people across the political spectrum, and all that does is convince me they are wrong and rude besides.

I know there are people who love to talk about the "all funds budget" and who think Back to Basics was the answer to everything. But in a free country no one is required to take the orthodox view--no matter whose orthodoxy. From what I have heard from a variety of sources (incl. my state sen. who has served on Ways and Means for years and had the LFO and LRO experts talk to a town hall meeting incl. this issue of the all funds budget) I don't believe that Back to Basics was a viable alternative. Call me any name you want, and I'll still agree with a personal friend who called Back to Basics "a weak budget" .

So what then are the alternatives: higher taxes budget cuts

borrowing to balance the budget gimmicks like what we saw in the era of Measures 28 and 30.

I don't believe that the second 2 are viable options.

So that leaves either taxes or budget cuts. Anyone who says that there weren't stark budget cuts this session, and that there weren't job cuts needs to prove that no public employee lost a job (or lost hours). If a library assistant was cut from full time to half time due to budget cuts, are they going to be OK with that because all that really matters are private sector jobs?

I know there is a philosophy that only private sector jobs matter, but if I had a store I'd want my customers who were teachers or state troopers or county employees or other public sector workers to keep their full time jobs so that they would be able to afford to shop in my store.

Bob, you are a good representative for your point of view. But I've got pretty good sales resistance. I'm the daughter of an accountant and neither my Dad nor Grandpa worked in the private sector their entire life. They were active in a Republican Party which wanted people who thought for themselves (Grandpa was an anti-machine politician) and I doubt they'd be impressed with the current GOP.

I believe the folks on the Ways and Means subcommittees did a long hard slog to accomplish the budget. Whatever their vote on final passage of a budget, I saw those subcommittee meetings on Oregon Channel and the idea that Republicans were totally cut out and never contributed to the deliberations is bogus.

Bob, if it is an article of faith to you that tax increases kill jobs, you have the right to that opinion. But be aware that budget cuts contribute to unemployment whenever they cut jobs. And saying "oh, public sector jobs don't really count as jobs" is not going to win over anyone who is or knows a public sector employee, no matter how hard they try.

Why should my business pay a tax rate of INF. Here is a lil' real world example of what will happen. I started a new biz this year and invested substantial startup capital, all spent with Oregon businesses btw. As a result, I will have ZERO profits/taxable income for the year. My tax bill....$150. 150/0 = INFINITE TAX RATE.

Actually, mp97303, $!0/0 = INFINITE TAX RATE as well. So I guess your position is that your business should pay no state tax at all until it turns profitable, should it ever do so. Are there any other states near by that have tax structures like that?

Hi LT,

I don't think it's fair to describe my views as "an article of faith." When the government chooses to tax an activity, the effect is to discourage that activity. That's part of the rationale for "sin taxes." A tax based on income tends to discourage the earning of income (or causes smart people to find ways around it).

I have not argued that all tax increases kill jobs, just that these particular tax increases--causing Oregon to have the highest personal income tax rate in the country, one of the highest corporate income tax rates in the country, and a new gross receipts-based tax-- are going to do serious harm.

Obviously, an income tax at some level has to be part of the mix. Almost every state has an income tax, so the fact that we have one does not particularly disadvantage us. But if Oregon ends up having the highest income tax rate and also a gross receipts-based tax, from the perspective of business activity, we will be disadvantaged.

One other point on jobs. From the point of view of the person who has a job, a private sector job or a public sector job are basically the same. Both of them put food on the table. But at the end of the day, the only way there can be public sector jobs is if there is private sector economic activity that generates tax revenue to pay for them. And if these tax increases will hurt private sector economic activity, which I believe they will, ultimately they will not be good for public sector jobs either.

Bob Wiggins

@Ron

My position is that NO business should pay state INCOME taxes if they have NO TAXABLE INCOME unless INDIVIDUALS are subjected to the same standards.

Bob - you are coming from a morally non-neutral stance on sin taxes. Actually, sin taxes are considered the pot of gold that will never run dry no matter how intensively you scoop.

Sin taxes are being plundered away right now to try to keep Oregon afloat because it's known smokers will desperately smoke no matter what; drinkers continue to drink.

Steve, thanks for the comments back. I fail to see why the Washington gross reciepts tax has anything to do with taxing Oregon business at gross income and revenue when we have no sales tax. But, it was an answer - Thank you.

Now I'll point out one small industry that many Oregonians do not realize even exists here in our state. Almost all major helicopter operations companies in North America have corporate offices in Oregon. Columbia, Carson, Croman, Evergreen, Erickson Air-Crane and Superior come to mind. Of these, only Carson has offices also on the East Coast. This industry grew out of the helicopter logging practices that developed over the previous generation. With a curtailment in logging in the state, these companies now are involved in logging, construction and firefighting nationally and internationally.

<h2>Their revenue looks fantastic until one looks at what it takes to keep a heavy left, Type I rotorcraft maintained and full of fuel. These companies employee hundreds of highly trained and very well paid Pilots, A&P mechanics, Crew Chiefs and support personnel. The additional revenues tax on top of the personal income tax surcharge could well prompt one or several of these companies to move their base of operations out of state. Beware the law of unintended consequences, these companies fly their assets.</h2>