Another Solid Reason to Vote "Yes" on Tax Measures: Good for the Economy
Chuck Sheketoff
Here's another reason Oregonians should say "yes" to the revenue measures likely on the ballot in January. Three dozen Oregon economists issued an open letter backing the Oregon legislature’s decision to balance budget cuts with tax increases targeted at corporations and high-income Oregonians, calling it “a prudent course of action” from an economic perspective.
The economists’ letter echoed a report released last week by the Oregon Legislative Revenue Office. The economists in the non-partisan revenue office concluded that the tax measures would be better for Oregon's economy than cutting services.
The report by the legislature’s economists and this open letter from dozens of Oregon economists provide a one-two punch that ought to settle the matter of what’s in Oregon’s best economic interests. The bottom line: economists agree that targeted tax measures will help protect Oregon's economy.
Recognizing that the legislature had “no easy options” for balancing the state’s $4 billion budget shortfall, the group of economists concluded in their letter that “in a recession, it is preferable for states to enact targeted tax increases than to cut services.” That’s also the recommendation of “eminent economists, such as such as President Barack Obama’s budget director Peter Orszag and Nobel Prize winner Joseph Stiglitz,” the letter noted. [Read the Orzag and Stiglitz paper (PDF).]
Cutting services is more damaging than targeted taxes because “the bulk of the money that the state spends on public services — more than 90 percent of which goes to education, health and human services and public safety — is spent right here in Oregon,” the economists’ letter said.
By contrast, “tax increases targeted at high-income households and corporations” don’t reduce total in-state spending as much. The economists said that’s because high-income households don’t spend all of their money, and some of the money they spend is likely to be spent outside the state. And since “a significant fraction” of Oregon’s corporate income taxes are paid by out-of-state corporations, the tax increase on corporations keeps money in Oregon that would otherwise leave the state, according to the economists.
The legislature’s revenue economists described this phenomenon as “leakage” of money from the state economy in the absence of the tax increases.
The revenue office and the group of economists also concurred that reducing state spending would cause an even greater reduction in total economic activity because Oregon would lose federal matching funds.
Those are funds that the federal government sends to states that put up some of their own money to help pay for certain programs such as Medicaid. The federal government may provide two or more dollars for every one dollar spent by the state, depending on the particular program.
The positive impact of federal dollars coming into Oregon’s economy as a result of the revenue measures is something the opponents refuse to acknowledge. The federal match is an undeniable economic boost to Oregon’s economy and an important reason why voters should join these economists and say ‘yes’ to the tax measures in January.
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Oct 7, '09
I fully support the corporate minimum hike. But I have several problems with the personal tax hike: it is a permanent increase for a, hopefully, temporary problem; it is not keyed to inflation, so more and more people will be hit with it over time; it is discriminatory against single parents; and I think the threshold is set too low. $125K is not rich, especially if people are rebuilding their retirement funds in the aftermath of two economic crashes in a period of 8 years. I am not sure, but it may discriminate against same sex couples, too-- I could get married and avoid the tax but my friends Richard and Jim cannot (or does the "head of household" allow for same sex partners?). I will personally vote against its repeal, but think it should be revised and, preferably, given a sunset clause.
Oct 7, '09
Was this open letter to Oregonians distributed to anyone other than OCPP?
Oct 7, '09
I'm sorry but a single person making over $125K can afford a slight tax increase. My understanding is that the new personal income tax rate will hit less than 5% of Oregonians, who will on average experience a tax increase of $100-250 a year. Even if this does discriminate unfairly, the differences are minuscule and not worthy of serious concern. Considering how critical it is to maintain state services during tough times, when people need them most, and considering how close this election is shaping up to be, I would hope folks would keep quiet about their little quibbles and lend full support to what is obviously good policy, on balance. Any quibbles can be fixed later. CA and WA are firing teachers to close budget holes, adding more to unemployment. That's the alternative. Both of these measures are universally recognized by economists as good policy, and the legislature showed a lot of courage by passing them. Let's try to do what we can to help the cause.
2:32 p.m.
Oct 7, '09
Will -- I suspect that the fact that top bracket is not adjusted for inflation means that they will revisit the issue in the future. As to this being "a permanent increase for a, hopefully, temporary problem," that's not so. The permanent nature reflects the loss of federal ARRA funds AND the fact that in our overall tax system the wealthiest Oregonians pay a smaller share of their income in state and local taxes than everyone else.
mp97303 - It is distributed BY OCPP, not to OCPP.
Oct 7, '09
@MichaelB -- Considering how critical it is to maintain state services during tough times, when people need them most...
<s>So you will be voluntarily paying additional taxes to the state this year, given how important it is, or is that just for others to do?</s>
mp97303 - aka - [email protected] - the topic is whether the measure is good for the economy. Stick to it. Don't take it off track.
2:58 p.m.
Oct 7, '09
To Will Hobbs. The tax filing status in Oregon is a little confusing. We have two categories, Single and Joint, into which we squeeze the federal categories. In Single, we include single and married-filing-separate returns. Joint includes joint, head-of-household, and surviving spouse returns. Most single parents with children living with them qualify for federal head of household status and therefore Oregon Joint status. The new tax plan would affect them only on income over a quarter million dollars. Domestic Partners qualify as if they were Married for Oregon Personal Income Tax purposes.
I hope this helps. Oh yes, to keep the tax measures and the basic budgets they support, vote "Yes" in January. If you want to "repeal" them, vote "No." I will be voting "Yes."
Oct 7, '09
Not all economists agree. I certainly do not and either do other prominent economists in the state.
Read up a bit on what the corporate tax increase would do to the state here:
http://www.cascadepolicy.org/2009/06/23/raising-oregon%E2%80%99s-corporate-income-tax-rate-will-cost-43000-oregon-jobs/
"Raising tax rates of any kind risks impairing the private sector’s motivation to invest in activities that support job and income growth. However, the taxation of corporate income is particularly injurious to growth."
Also, read up on what the high income tax would do:
http://www.cascadepolicy.org/2009/06/11/taxing-the-%E2%80%9Cwealthy%E2%80%9D-more-will-cost-36000-oregon-jobsby-bill-conerly/
These two tax measures will cost the Oregon economy 70,000 jobs that will either be lost or not created or some combination of the two.
Oct 7, '09
These two tax measures will cost the Oregon economy 70,000 jobs that will either be lost or not created or some combination of the two.
This is perhaps the most widely distributed unsubstantiated claim in Oregon politics since the claim that the Bottle Bill will destroy Oregon's economy,
It is hard to believe that Joe Conerly's methodology combined with the demonstrated non-existent ability of Cascade Policy Institute to predict the future has become the basis for this completely deceptive campaign to destroy public services in Oregon.
I thank the economists and Chuck for bringing sense back into the public dialogue as we strive to counter this deceptive but pernicious 'job-killing' marketing steamroller.
Oct 7, '09
"These two tax measures will cost the Oregon economy 70,000 jobs that will either be lost or not created or some combination of the two. "
Is there a source more neutral than Cascade Policy Institute reporting those numbers?
In a free country, people don't have to believe in Blue Oregon, Cascade Policy Institute, or any other group associated with a particular point of view.
If you polled every small business in Oregon, would they say they were going to fire people if the tax measures are upheld?
I do mean Joe's Pizza, Marie's gift shop, the local laundromat, the locally owned grocery store or bakery, the day care center, the small restaurant, etc. Prices from suppliers, customer base, popularity as a local business, and all other factors mean nothing because tax increases = layoffs?
Every business in every county in Oregon will look at laying off people if the taxes are upheld? Sez who?
Is there any university economist, or LRO/LFO, or any other serious analysis saying the result you predict will happen? If so, where can we read it?
My concern is that speaking for groups is dangerous. Not all women supported Hillary Clinton for President, groups endorse ideas/candidates all the time only to find that their members vote as individuals.
Oct 7, '09
mp97303- I very much hope someday to be rich enough that I fall into a higher tax bracket, and should that day come I will be more than happy to contribute my share.
Todd-
It's not as though we have a choice of raising taxes or not raising taxes. The choice is raise taxes or cut services/fire teachers. Forgive me if I don't trust Cascade Policy "experts". Didn't they argue for Bush's tax cuts? How well did that policy do at fixing the national economy?!? I'm not an economist, but my understanding is that between the alternatives of a) raising taxes and b)cutting services, that cutting services has a more negative impact on the economy, and there is no serious controversy about this.
Oct 7, '09
I voted in favor of keeping the temporary tax increase during the last budget crisis that neither our current gov or democratic party majority house and senate fixed. I think it was because it was a) temporary and b) we all gave up a little for the good of all.
I'm not so sure this time around. Its as if I keep hearing that is "OK" to tax somebody else in order to maintain the status quo. tax the "wealthy" tax corporations, tax anybody but me. Had the legislature fixed the underlying problems with state funding in the intervening 5 years we would not be in the fix we are today. Had there been some true leadership at the state level by our governor we would not be in this fix today.
I'm not sure how I will vote....
Oct 7, '09
I wholeheartedly support raising taxes on businesses and "the rich" to whatever level our government leaders deem is necessary to support our vital government services.
Oct 7, '09
I think it is important to be very clear about what the "open letter" says, and what it does not.
The "open letter" is based on a fairly simple argument. If the government takes a dollar in taxes, it will spend that dollar in the current year. Overall spending in Oregon in the current year will reflect the government's expenditure of that dollar (plus some matching federal funds). The taxpayer from whom the dollar is taken, on the other hand, if he had been allowed to keep his dollar, may not have spent all of that dollar this year (he might have saved it or invested it), and he may not have spent the portion he did spend entirely in Oregon. (At the risk of sounding like a wise guy, this argument would justify the state taxing 100% of the income of any Oregon resident, since the state would spend 100% of the tax receipts and the poor taxpayer might not have.)
Here's what the open letter does not say:
The "open letter" does not dispute the claim of Oregonians Against Job-Killing Taxes that the tax hikes will result in a loss of private-sector jobs in Oregon.
The "open letter" does not address the fact that some of the taxpayer's dollar that will now go to the state for current spending would otherwise have been invested in Oregon businesses. Equity and debt financing right now is very tight, so reducing the pool of investment capital is not helpful.
The "open letter" does not address that the tax increases will cause a migration from the state of higher income taxpayers (ultimately causing a reduction in tax revenues from them), though the Legislative Revenue Office Report Chuck links to does in fact acknowledge that point.
The "open letter" deals in aggregates, not individuals. Many "high income" individuals and corporations that will be affected by the tax hikes will reduce spending in Oregon dollar-for-dollar by the tax hikes--for example, an unprofitable start-up whose taxes are significantly increased by the gross receipts tax.
The logic of the "open letter" would not be limited to supporting the legislature's tax package. It would also support an even bigger increase in state spending in the current year--regardless of the long-term importance of what the money was spent on--along with an even bigger increase in the top personal marginal rate or raising the "middle" marginal rate on most taxpayers from 9% to some higher number or any other tax increase that didn't result in a dollar-for-dollar reduction in spending by the taxpayer in the current year.
In short, the "open letter" reflects at best only a very "short term" view of the situation. Even the Legislative Revenue Office Report Chuck links to observes that over time, the tax hikes themselves will have a negative impact on Oregon's economy (though it suggests that if the state spends the new tax money wisely, the negative effect can be offset).
People are certainly free to consider the point made in the "open letter" in deciding how to vote, but it is by no means a "solid reason" to vote in favor of these tax hikes.
Bob Wiggins
Oct 7, '09
According to LRO, the tax increases HURT the economy over the next five years. Oregonians would have to wait more than seven years to see the meager positive impacts speculated by LRO. Don't hold your breath.
Oct 7, '09
Would it be an immodest proposal to couple a personal income tax hike with not taxing unemployment benefits?
In reality, that's a fictional quantity, correct me if I'm wrong, but most pay federal tax on that and write it off on their Oregon return, so Oregon isn't really get tax revenue from their unemployment benefits. What I'm saying, basically, is earmark a part of the personal income tax increase for unemployment related services/benefits, to the tune of what Oregonians pay to the feds on unemployment benefits.
While we're getting progressive... Dump all the aforesaid. Why shouldn't there be three classes of employment, full, partial/under, and jobless, and use them in the tax tables directly? Makes more sense than creating an entity called "household", based on your financial relationships with people. It would be nice to have all the above, at least in transition.
Fund it by eliminating the dependent tax credit. Maybe that's what makes people skiddish about progressive agendas. When you really get to it, there's social engineering involved.
5:26 p.m.
Oct 7, '09
Gee Bob, this is sorta like your screed in Tuesday's Oregonian in one particular. You just assert a bunch of things, claim that they're "facts" and drive on.
Chuck puts up a post which cites Nobel Laureates, nationally and locally recognized economists (in fact it looks like most of the economics professors at the state's top universities), and the Oregon Legislative Revenue Committee. You counter with a comment roughly equal in length which seems to state your religious belief that any tax at all will automatically be detrimental to the state's business climate.
As is the case with any True Believer or any hustler that preys on True Believers, no amount of relevant fact based argumentation will sway you, but the intellectual dishonesty is frankly staggering.
5:40 p.m.
Oct 7, '09
And to the always lovely Garage Wine, I've gotta say:
Did you read the LRO report? Looks like the harmful effects are somewhere in the hangnail category for damage done.......
Distribution Effects
• Roughly 2.5% of personal income tax filers are expected to have higher state tax liability under HB 2649. • About 5% of corporate income tax filers are expected to have higher tax liability due to the higher corporate income tax rates contained in HB 3405. • Most corporations will experience an increase under the new corporate minimum....Corporations paying the minimum tax will have a liability equal to about 0.1% of Oregon sales.
Impact of Measures on State’s Tax Burden Compared to Other States
• The measures are expected to have a relatively minor impact on the tax burden compared to other states. Using the 2005-06 Census data and holding other states constant, Oregon’s per capita taxes move from 34th highest to 31st highest. • Oregon’s overall business tax burden is the 3rd lowest among the states according to the annual Council on State Taxation Study conducted by Ernst & Young. With the revenue estimates from the measures included and holding other states constant, the state’s business tax burden would move to the 5th lowest.
Oct 7, '09
I know of three high income earners who are already planning on making 124,900 next year in AGI.
Beware the centripital arc of a knee jerk reaction.
Oct 7, '09
Indeed, Bob's rant about arguments unrelated to those that the economists are making is completely analogous to the lack of substance in the whole "job-killing" campaign.
But you must give them credit. They do yell. They do yell loudly. And they do yell loudly and consistently. That certainly can make a campaign viable.
Oct 7, '09
Oregon Unemployment Trends - August 2009
Oregon Unemployment Trend Heat Maps: A map of Oregon Unemployment in August 2009 (BLS data) http://www.localetrends.com/st/or_oregon_unemployment.php?MAP_TYPE=curr_ue
versus Oregon Unemployment Levels 1 year ago http://www.localetrends.com/st/or_oregon_unemployment.php?MAP_TYPE=m12_ue
Oct 7, '09
Garage Wine, I just read the LRO report, and this seems to contradict what you said.
http://www.ocpp.org/2009/20090930LROReport.pdf
The measures are expected to have relatively small negative effects on overall income and employment.
• Roughly 2.5% of personal income tax filers are expected to have higher state tax liability under HB 2649. • About 5% of corporate income tax filers are expected to have higher tax liability due to the higher corporate income tax rates contained in HB 3405. • Most corporations will experience an increase under the new corporate minimum. The new minimum is an alternative tax, meaning that corporations pay either through the tax rates based on net income or the minimum based on Oregon sales, whichever is higher. Corporations.
Budgetary Consequences:
• A yes vote will implement the revenue raising effects of the two measures. The September revenue forecast shows a projected 2009-11 General Fund ending balance of $94.8 million. The September forecast also indicates that the conditions spelled out in SB 5520 are projected to be met thereby triggering a $200 million allocation to the State School Fund in June of 2010.
• A no vote will reduce the General Fund revenue forecast by $733 million compared to the September forecast. This will give the General Fund a projected deficit of $638.2 million and negate the $200 million allocation to the State School Fund. Reserves available in the 2009-11 biennium from the Education Stability Fund and the Rainy Day Fund are estimated at $320.1 million.
Oct 7, '09
To LT and the always lovely Pat Ryan, I invite you to review Table 18 from the LRO study.
I'm just sayin' ... You can't get away from the the negative impacts of the tax in five years that matter most to most Oregonians.
Oct 7, '09
@Garage Wine And if the legislature made equivalent cuts instead of tax increases, the negative impacts would be a whole lot higher. That's pretty much the whole friggin' point of the LRO report and basic economics.
@Kurt Your friends need better accountants, or else they're pulling your leg. The increases are MARGINAL tax increases, which means the tax rates only apply on income above the threshold.
Let's let the numbers do the talking:
For the sake of simplicity, let's say they get taxed at the current 9% on every dollar up to $125,000. The income tax on that amount of income is $11,250, the same as it is today. Their net, then, is $113,750.
But say they decide to throw caution to the wind and make, say, $130,000. The tax on that additional $5,000 (at the increased 10.8%) is $540. That's an additional $90 more than what it's taxed at today.
So, they can cap their earnings at $125,000 and take home $113,750. Or they can make $130,000 and take home $118,210.
Are your friends just bad capitalists?
Oct 7, '09
how about cutting the bloated state govt folks?it appalls me that none of you on here call for that.the state chuck sheketoff is still wasting millions of dollars on consultants now and they refuse to cut them so tell us why these tax increases are so necessary?how about the state tighten their belts like all of us in the private sector have had to?enough of this baloney that voting no on these tax increases will cripple everything too it wont.scare tactics i see through unlike the rest of you liberal posters on here.
Oct 7, '09
Economists who oppose tax increases "screed" with nothing to back them up. But, of course, we should all trust, without reservation or thought of conflict of interest what a bunch of state employee economists who work for the Legislators who crafted the tax increases or work the system of higher education which benefits from the increases tell us in a report or letter. ROTFLMAO. A Willamette University economics professor once told me you could lay all the economists in the world end to end and never reach a conclusion. So true. Economists reach a conclusion and then work backwards to compile the information they need to make their case. Both sides do it.
Oct 7, '09
Pretty glad we didn't waste any taxpayer dollars on matthew's education.
Oct 7, '09
Matthew, exactly what is bloated?
That state government offices that don't operate 24/7 (the way prisons, state police, etc. do) are going on furlough next Friday and multiple Fridays after that, when they should only work half time or something?
Is there a specific state program you want eliminated?
Or are you just going to scream BLOATED GOVERNMENT without specifics?
$2 billion in cuts was not enough for you? What would you have cut?
Oct 7, '09
Dangerously Cheesy, no my aqaintances are tired of being singled out by the state and feds for their success. they will voluntarily reduce their income to under 4125k AGI on principle.
It's kind of like reducing fuel consumption as prices rise. Then states, to their horror, discover that they aren't getting the projected revenue. the knee jerk reaction is to do what? Why raise taxes of course, thus perpetuating the cycle.... Oh wait, that is also what Oregon is doing effective January 2010.
Sure, at an additional nickle/gal of fuel we are only raising the cost by about 1.5%, but it is the principle of the thing. Many people will decide to drive less. Not altogether bad from an environmental perspective, but a disaster from the perspective of the democratic party leaders who rammed the new tax through the legislature with a promise of more jobs. A promise that will more than likely be empty or temporary at best.
Oct 7, '09
Kurt, your friends are, pardon the expression, nuts.
Anyone who would voluntarily reduce their income $1,000 in order to save $18 in taxes would get hooted out of the capitalist conclave summarily.
Plus, if they're "tired of being singled out" that must mean they feel guilty about shouldering less than their fair share of the state and local tax burden. The top 5% of taxpayers pays a smaller percentage than average of these taxes. Guess who pays the most: the bottom 20%. One reason for making half of the increase permanent is to partially redress this imbalance. Another is the need to build the Rainy Day Fund so we don't have to go through this crap every recession.
Oct 7, '09
LT, I would start with the almost $400k given out to just 11 employees in the State Treasurers Office :-)
Fair and balanced - you just don't get it. But thats OK. The folks considering voluntarily reducing their AGI are tired of being scapgoated. Many are excellent voluteers w/in the community and feel no special "duty" to pay higher taxes merely because they make more than a number arbitrarily hit upon by democrats at the state and federal level. they are voluntarily withdrawing their production from the equation.
This is part of what Bob Wiggins has been writing about as well. when the government arbitrarily sets a number, above which higher fees and taxes apply, some will decide it isn't worth it to produce up to that arbitrary number.
Oct 8, '09
The title of this post:
And the (apparent, though not explicitly explained) edit to an early comment in the thread:
I read the linked letter in question. It doesn't say that increasing taxes will be good for the economy.
What it says is that tax increases reduce in-state aggregate demand, but that cutting services would reduce such demand even more.
I'm quite impressed with Chuck's mental gymnastics leading to the title of the post saying that these measures are "good" for the economy. It would be more accurate to claim that the measures would be "less bad", based on the letter itself.
By the way, I believe whoever did edit MP97303's comment upthread missed the point. The letter expresses the opinion that maintaining government funding through higher taxes is preferable to cutting services. The comment asked the very pertinent (if perhaps oblique) question, "If maintaining state tax revenues is so important to the economy, isn't that a responsibility all Oregonians should share?"
On a related note of my own, in response to Michael B:
If that's so trivial as to be unworthy of serious concern, why not make it really trivial and spread the burden around a bit?
If 5% of the population would need to contribute on average $100-$250 a year, you could get the same amount of money from the entire population for only $5-$12.50 each a year.
And really, who isn't getting at least $5/year worth of state services? After all, we are constantly assured that this extra revenue is for a very good cause and is absolutely vital. If it's really so vital, why doesn't everybody have to kick in an extra five bucks?
FIVE BUCKS. For a little shared responsibility.
Yeah, some people might have to pay a little more... like $12.50... but after all if we're unfairly discriminating only a little bit from one person to the next, it's nothing to worry about. At least as far as Michael B is concerned. And $5 is about as "miniscule" a difference as you can find in state finance.
Oh, one last point. I had another really good laugh at this classic knee-slapper from Chuck:
Seriously? This from the fellow who has complained so loudly about how long the $10 corporate minimum has been on the books without revision? This is the guy who has faith that the issue will be "revisited" in the future?
Chuck, you've gotta figure out a way to generate electricity from all that spinning you're doing... sell it back to the power company... and maybe you can make enough to start paying those extra income taxes you like so much. :-)
Oct 8, '09
All of my friends have told me they're going to voluntarily limit their AGI to $7,500 (the rate goes from 7% to 9% at $7,600), because they're tired of getting scapegoated and singled out.
Sure, they could make more money in order to eat and pay rent, but it's the principle of the thing. If the government is going to set an arbitrary income number at which to tax at a 9% rate instead of a 7% rate, there are going to be a whole lot people who voluntarily cap their income below that number just on principle.
Actually, since the rate arbitrarily jumps from 5% to 7% at $3,050 AGI, I think my friends are actually going to voluntarily cap their income at $3,000 for the year.
Many are excellent community members who feel no special "duty" to pay higher taxes merely because they make more than a number arbitrarily hit upon by democrats at the state and federal level. They are voluntarily withdrawing their production from the equation.
Oct 8, '09
@ Kurt, with all due respect.
In spite of what your "friends" say (and I am sure you have more of them than I do), none of them are going to earn less on purpose, or on principle. In fact, I am quite sure that if they can earn even one extra buck, they will.
@Cheesy, your sarcasm is not lost on me......but,
An indication of how far our society has evolved is to look at how we take care of those who are truly in need, and those most vulnerable. Unfortunately, this state has yet to prove they can do either effectively, and without considerable waste. This is the reason why so many would vote against any tax increase.
If specifics about waste is requested, there are many examples out there. Several commenters could probably get closer to getting a more complete list made, than by asking only one person to do it. Probably would be best for BO to open another thread asking for ideas to help identify waste in the state budget, than for me to try to do it right here.
Oct 8, '09
Oregon need to use means testing for its colleges and universities. The rich kids don't need a free ride.
Oregon should open the transit market to private owner/operators.
Those are just for beginners. Lot more Oregon needs to do.
Oct 8, '09
@David Wright
Can I just send you my thoughts and you can ghost write them for me. You do such a good job of articulating what I am thinking.
just so Chuck can't claim I am taking this thread "OFF TOPIC" I have this comment:I wholeheartedly support raising taxes on businesses and "the rich" to whatever level our government leaders deem is necessary to support our vital government services.
Oct 8, '09
Matthew is just a right-wing troll (and an illiterate one at that).
I'm sure if he was dumb enough to build in a flood plain he'd want the gub'mint to bail him out after a flood.
Oct 8, '09
Good job with this post, Chuck.
I think we can safely summarize after 36 comments, over 2 days of name-calling and insult-hurling, that these basic claims are valid:
Voting YES on the tax measures will probably result in a stronger Oregon economy and not result in a net loss of Oregon employment.
Oct 8, '09
Roy, the focus on "waste" is misplaced.
Does anyone really believe there is more "waste" in government than in big companies? The best example of waste I can think of is a golden parachute for a CEO who took huge risks with other people's money and got fired for running the company off a cliff. In the same vein, big bonuses and salaries for the top execs of Fortune 500 firms, who now make a much larger multiple of the average wages in their companies than they used to. One definition of "waste" would be nonproductive or counterproductive expenditures. This type takes the cake, but is very seldom found in government.
My personal observation from working in both sectors is that private business is much more wasteful than it "needs" to be, to incentivize productive labor from its management class. The folks who proselytize for these incentives are just blowing smoke out of greed.
Oct 8, '09
The "waste" from state government to be eliminated from failure to pass these measures of tax equity will be the hundreds of laid off teachers, the weeks of school that are eliminated at the end of the year, and the newly hired state troopers who are laid off.
Oct 8, '09
Unfortunately I think this will be a hard-sell for Democrats this year- the primary force at play is probably the national economy- thanks to President Obama we a avoided a depression at least for the time being but a big wild card is lurking.
The dark cloud looming is quite frankly the swine flu- the official flu season just began a few days ago and it is most likely to run well through the Jan. election.
It is very possible even with the most modest CDC projections workplace absenteeism alone could cause major economic havoc and will likely seriously hit a core constituency in Oregon for higher taxes- namely teachers and educators.
Pre-occupied with a pandemic and out of work, strung out pay check to pay check, etc.- it's does not seem to me it bodes well for tax increases in late January or for campaign fund raising. A light flu season and the collective mental attitude may improve.
I'll be voting yes but I'm likely a minority out here in the sticks where peoplen really don't see the state as being their advocate.
Argue conflicting studies all you want most votes don't care- I would not trust anything from Cascade Policy Institute though I tell you that.
Oct 8, '09
Bill R:
...will be the hundreds of laid off teachers, the weeks of school that are eliminated at the end of the year, and the newly hired state troopers who are laid off.
Bob T:
Yeah, when government wants us to cry "Uncle" and agree to tax increases, they eliminate the very government employees most or all of us consider the few we really need. You'll never see threats to fire the Pickle Stem Measurer, or assistant to the Peruvian Cultural Exchange Director or nonsesne like that (because people will say, "Go ahead").
I'll oppose all increases so long as famous "People must pay their fair share" types like the Kennedys pay regular taxeson their fat annual checks from their off-shore trust fund. Joe Six-Pack pays a higher tax rate on his income than the Kennedys do on that income (as well a that handed down to them).
Bob Tiernan Portland
Oct 8, '09
"You'll never see threats to fire the Pickle Stem Measurer"
Do you have an actual example of this in OREGON? Who in Oregon is old money like the Kennedys?
Or is this not about Oregon, just about a rant on national Democrats?
Oct 8, '09
You will have to forgive Bob Tiernan- he hasn't digested a new idea since the Beverly Hillbillies went to color.
Oct 8, '09
Just curious, did these 36 economists get together and give their "open letter" to OCPP or did OCPP go out and find some economists that agreed with their POV?
I wholeheartedly support raising taxes on businesses and "the rich" to whatever level our government leaders deem is necessary to support our vital government services.
Oct 8, '09
Comrade Sheketov:
The infidels are fleeing the high tax strategy:
http://portlandtribune.com/news/story.php?story_id=125495171225164200
We need soliders on the Northern front to prevent their escape!
Oct 8, '09
Well, I won't argue that government wastes less money than private enterprise. I would even go far as to say in many cases our government operates much more efficiently than private business. Problem is, when using tax payer money there is no room for any waste or any error. That is the expectation from the public. If you poll the masses and ask.....does government waste our tax money? then the overwhelming answer would be yes. Like it or not. Remember, perception is just as powerful as the truth. That is why it is helpful to fully identify the waste, call it out, and discuss it in the open.
Oct 8, '09
Roy, I agree with much of what you said. But "poll the public"? Are you saying that you are willing to let a sample size of 600-1000 Oregonians determine what you think? I for one am tired of "we polled the public and they said" reporting without sample size, demographic distribution, questions, etc. being reported.
And who defines waste? Is it manageable caseloads instead of putting impossible numbers of cases in the charge of one person? Someone I once knew who had left public service and was working in a small business said that the work as a juvenile court counselor was very rewarding until the caseloads got too large. "If the caseload is no more than ___per worker, it is possible to help individuals. But above that number what you end up doing is merely shuffling paper."
OK, when staff are cut, doesn't that mean large caseloads (court, anything to do with juveniles, class sizes at any age, food stamps, employment office, etc.)? Or should all that be privatized because private industry always does everything at the same quality for less money?
There is a company in Wilsonville which does the online job applications for many school districts: EducatorZapp Inc.
Does their website work better for all concerned (incl. applicants) than school districts having their own websites managed by their local HR? Is it really less expensive for the district?
And then there is the question about whether tax breaks are always value for the money. There was a story on the news this morning about Dell closing a plant in N. Carolina. They had gotten some big tax break from NC for locating the plant there.
The announcement (900 employees will eventually be laid off) said "well, there just isn't the market for desktop computers there once was, and we will have to renegotiate the terms of our tax situation with them" or words to that effect.
Was that tax break a waste of money?
Much as the anti-taxers want to make unionized public employees the poster children of "waste" (OK for lots of management types to make more than the Gov.---they are management, and worth every penny?) , I suspect when some people talk about government waste they are talking about the unquestioning use of tax credits, the high management pay, etc.
"Do you think there is government waste" is an overly broad question. Suppose a certain percentage are willing to answer yes without a definition of waste--exactly what problem does that solve?
Or has politics become a debating society where scoring points is more important than solving problems?
Is saying that details matter a "liberal" thing? Does that mean Wm. F. Buckley, Barry Goldwater, Robt. Taft (my Dad's political hero, he was the Sen. Republican Leader when Truman was President) really become famous conservatives by saying details don't matter?
I believe we are living in a new political climate where individuals are more concerned about problem solving than ideology. Suppose a pollster asked a broad question about government waste and respondents refused to answer the question without a a definition of waste. How would the polling firm record those answers?
Another way the climate has changed--for years Jeld-Wen funded "conservative causes" and sometimes worked with Republican legislators to push specific ideas.
It is on the NPR website that one of their "around the country" stories today can be summarized this way, "The slowdown in the housing market has clobbered the region's largest private employer, Jeld-Wen. The company makes doors and windows for homes, products that rise and fall with the overall housing market"
Now, if someone wants to make the argument that cycles in the housing market don't affect some businesses more than the tax rate, let them try. I think that would be a waste of time.
Oct 8, '09
Well, if any of you are tired of drinking the union supplied Kool-Aid on this, you might look at this article: How's that taxing the rich working out for ya? (Warning: Contains facts and logic. Not for use with a closed mind.)
Taxing the "rich" has led to decreased revenue in most states it has been tried. And now that Clackamas County has decided to be hostile to business like Multnomah county and shut down small dog-training businesses in rural areas, tax revenue to the state will fall even further. Of course Clackamas county says they don't want to shut down businesses. Right! They must want to or they wouldn't be doing it. Why does Clackamas county hate agility and obedience training? Off-topic, I know. But still a good question.
Oct 8, '09
Businesses are less efficient than Government? That was facetious, right?
If I don't like a particular business, I don't reward them with my money. If I don't like the DMV, where is their competition I can give my dollars instead? If I don't agree with how the DAS spends its budget, can I give my dollars to a competitor?
No. Government is a monopoly. If my business doesn't do a good job, people won't patronize me and I go out of business. If government doesn't do a good job, no one is surprised.
If you want to argue the efficacy of Government, go ahead. We need a good laugh.
Oct 8, '09
Kenray,
I have worked for both the public sector and the private sector. I was working for a major corporation when I got my time card back in the mail, saying it had been filled out wrong. They were in the process of computerizing payroll at the time.
I called my supervisor. He said, "You filled it out right as of the day you mailed your timecard. But then they changed the rules, so by the time your timecard arrived it was filled out wrong. Then they decided maybe they should change the rules back. From what they have told me, if you just put your timecard in another envelope and mail it back, it will be accepted."
No that did not happen in a government bureaucracy, but in a major corporation.
Anyone who claims all business always works perfectly and never has bureaucratic problems, all government workers are lazy bureaucrats is not going to win over anyone who has ever fought a corporate bureaucracy.
Oct 8, '09
i will tell you lt where they can cut.a major league cut in the size of the state govt.all spending on consultants cut.i want all non citizens and their anchor babies off all state services because no american gets to illegally go down to mexico and get any benefits.ginseng advisory committee,covered bridge committee,salaries,pers and the bloated benefits of the govt class need to be cut significantly.its time the govt class including all state workers really felt the economic pinch right now because they clearly are not and i want all state workers to have to start paying some of their medical premiums like all of us in the private sector have had to.the bloated bureaucarcy in this state needs to be cut to the bone too.let there is plenty to cut in state govt and its time the state listened to the private sector for once instead of the greedy selfish public employee unions.2 billion is not enough in cuts more is needed lt.we dont need to spend any more money on public education either because it is very well funded now at 10,000 bucks a kid
Oct 8, '09
mike i dont believe any of the baloney on these liberal sites like blue oregon about how broke the state is.they have a 54 billion all funds budget now with a 2 billion surplus yety the public is only told the general funds budget of about 15 to 17 billion and they are 4 billion short which is a bunch of baloney.i have common sense and brains unlike most of you liberal posters on here because i dont fall for the same old tired liberal scare tactice about how broke govt and schools are.sorry when i see millions of dollars annually wasted by state govt and schools on consultants im sorry therer is no budget or funding crisis.call me a right wing troll if you want but its time you left wing nuts quit believing everything you hear.
Oct 8, '09
All funds budget? Any money collected for any purpose can be legally used for any other purpose?
Check out the SAIF Funds case from the 1980s. It involved a trick like that to balance a budget. A court later ruled that businesses which sent money to SAIF for insurance had the right to expect it to be used for insurance, not to balance the budget.
My Republican state senator spoke about that during a town hall meeting some months ago.
Now if she is "liberal" because she doesn't believe in the "all funds budget" rhetoric, what does that make someone without political experience who believes in that rhetoric?
Or Matthew, are you currently working for a politician?
Oct 9, '09
Education must come back as a fundamental value. How cutting services or cutting taxes impacts the economy is more complex. Supporting education is not.
Oct 9, '09
excuse me theresa kohlkoff oregon very much values education now and has for years.we spend more more per pupil now on education than any other state in the west when you include the all funds budget not the general funds budget.the all funds budget is millions higher than the general funds for schools.theresa we well fund schools now at 10,000 bucks a kid so enough of this liberal baloney and nonsense that we dont value and support education because yes we do.
Oct 9, '09
Fair and Balanced asks a very important question, "Does anyone really believe there is more "waste" in government than in big companies?" I believe it, but don't know it for sure, partly because waste is hard to define and measure. But, since both private and public sectors are run by fallible humans, some waste is inevitable. The saving grace in the private sector is that firms and individuals can fail utterly and go bankrupt. Firms can disappear entirely. Most companies ever created are now gone. Government programs can also disappear, but my sense is that the dissolution rate is lower than in business world.
Oct 10, '09
You censor mp for being slightly off topic, but you let the fucking dumbest dittohead in Portland empty his copy buffer again? Come on.
Posted by: Kristallnacht | Oct 8, 2009 2:24:13 PM
Comrade Sheketov:
The infidels are fleeing the high tax strategy:
http://portlandtribune.com/news/story.php?story_id=125495171225164200
We need soliders on the Northern front to prevent their escape!
If you really need to spew then try the #bringbackdueling tag on twitter. Show your cowardly face, WunderBlunder! Perhaps you didn't get the message, back in May, but someone spelled it out perfectly.
"He's used 4 aliases, and has spammed every revenue topic, save the week his parents sent him on spring break to the Carribean. He thinks you're another of his little playthings. Have some respect for your serious readers and kill the goddamned little cocksucker's spam! Seems to have changed to Hal from Wunder Blunder, realizing he was betraying his existential status.
Oct 10, '09
LT:
Do you have an actual example of this in OREGON?
Bob T:
Since Bill R. mentioned laid off "teachers" and "state troopers", I'm asking if there are absolutely no other positions that we can do without before getting to these two positions? Or is it that firing or threatening to fire teachers and police "does the trick" when it comes to making the saps cry uncle? [Note: my ref to a "pickle-stem measurer" derives from a Clinton Admin study of lengths of pickle-stems conducted by the Dep't of Agriculture, which then Sec of Ag chuckled about when mentioning it -- I use the term as the ultimate example of useless employee in bloated government].
LT:
Who in Oregon is old money like the Kennedys?
Bob T:
Wouldn't matter -- so long as the Kennedys and others with piles of cash (incl Chomsky, et al.) set up trust funds so they and their descendents can get nice annual checks or inherit large portions w/o paying much of anything in taxes (these being great believers in "paying a fair share"), no one should pay any more to any level of government than they already are.
LT:
Or is this not about Oregon, just about a rant on national Democrats?
Bob T:
I singled out no party.
Bob Tiernan Portland
Oct 10, '09
lt i dont work for any politician i have my own opinions.
Oct 11, '09
LT:
Anyone who claims all business always works perfectly and never has bureaucratic problems
Bob T:
I suppose you must have heard someone claim that. But if that person understood basic economics he wouldn't make such a claim. The more accurate point is that there's more of an incentive to be efficient because the market will take you down if you don't (unlike government which can simply seize more money to pay for its incompetency if it has to, and which it has been doing for many decades).
Bob Tiernan Portland
Oct 12, '09
Don't put words in my mouth. I never said business operated "perfectly". But dysfunctional businesses generally go out of business. Dysfunctional government comes and asks for me to pay higher taxes, fees and fines.
Oct 12, '09
KenRay:
I never said business operated "perfectly". But dysfunctional businesses generally go out of business. Dysfunctional government comes and asks for me to pay higher taxes, fees and fines.
Bob T:
Exactly. But the Kennedys won't be paying for this because they've been paying about a 0.4% tax rate on their trust fund and inheritance money, while supporting jailing commoners and stomping on them and seizing their property and auditing them all year long to squeeze and squeeze. But they figured out long ago that if they "cared" about giving us free stuff after taxing us for it, they'll be elevated to saintly status when they die.
Bob Tiernan Portland
Oct 12, '09
"Exactly. But the Kennedys won't be paying for this because they've been paying about a 0.4% tax rate on their trust fund and inheritance money, "
Opening sentence of this post:
"Exactly. But the Kennedys won't be paying for this because they've been paying about a 0.4% tax rate on their trust fund and inheritance money, "
Bob, if you can't tell us which Kennedys pay OREGON taxes, why do you keep making comments about them? Where is their "trust fund and inheritance money" invested--in Oregon or elsewhere?
Why not talk about Phil Knight or someone with actual Oregon roots?
Oct 13, '09
LT:
"Exactly. But the Kennedys won't be paying for this because they've been paying about a 0.4% tax rate on their trust fund and inheritance money, "
Opening sentence of this post:
"Exactly. But the Kennedys won't be paying for this because they've been paying about a 0.4% tax rate on their trust fund and inheritance money, "
Bob, if you can't tell us which Kennedys pay OREGON taxes, why do you keep making comments about them? Where is their "trust fund and inheritance money" invested--in Oregon or elsewhere?
Bob T:
That was a response to KenRay saying this:
I never said business operated "perfectly". But dysfunctional businesses generally go out of business. Dysfunctional government comes and asks for me to pay higher taxes, fees and fines.
In other words, paying more (anywhere) to pay for dysfunctional government.
Bob Tiernan Portland
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