Wage gap grows between rich and poor in Oregon: Plus ca change...
T.A. Barnhart
This report would have been useful a few weeks ago. They were working on it; didn't they realize the state needed this info out then?
Oregon's wealthiest are not only earning more, but the rate at which their incomes are growing far outstrips the middle class and the poor."Wage inequality in Oregon rose steadily between 1990 and 2000, declined slightly in 2001 and 2002, and continued to increase to its peak in 2007," the study said.
"The study" is a draft analysis of wage trends produced by the Oregon Employment Department and reported late last night by OregonLive.com.
Income is only part of the story, of course:
"The analysis considers only wages. The disparity would be far greater if the numbers included investment income."
With less than 36 hours before polls close on Measures 66 & 67, and with the No campaign arguing that the modest tax increases will make things worse for the state, it's hard to imagine that a 2% increase on the upper portion of the wealthiest in Oregon can do any harm to those who are falling farther and farther behind. In fact, as Oregonian reporter Jeff Manning notes,
University of Chicago economist Raghuram Rajan, former director of research at the International Monetary Fund, posits that stagnant wages for the bulk of Americans contributed to the economic crash.
That's a University of Chicago economist who worked at the IMF, pretty well establishing his conservative creds. The article notes that a number of other conservative, "free-market" scholars have come to recognize "that a struggling middle class and a dysfunctional underclass poses a threat to all".
In a controversial and much-cited article that ran this winter in the quarterly National Affairs, conservative writer and entrepreneur Jim Manzi argues that the growing income disparity poses a dilemma for which there is no obvious answer.
"If we reverse the market-based reforms that have allowed us to prosper," Manzi wrote, "we will cede global economic share; but if we let inequality and its underlying causes grow unchecked, we will hollow out the middle class — threatening social cohesion, and eventually surrendering our international position anyway."
Kevin Phillips, one of the architects of Nixon's "southern strategy", recognized as long ago as the Reagan Administration that the growing disparity between rich and poor would harm the nation's democracy; he published "Wealth and Democracy" in 2002 (which contains the fascinating information that many of America's earliest sources of wealth were from piracy, under licence from the new government; how little things change).
Of course, the No campaign will continue to argue that to tax 2.5% of Oregon's businesses will only exacerbate this situation by cutting jobs further. This is pure and complete crap; the lack of available credit is killing jobs far more than the worst possible effect of M67 could do. No company seeing its tax bill rise by $7,500 -- and it would take sales of at least $7 million for that to happen — is going to cut jobs. This is simply another excuse by Oregon's "Just don't do it", pro-corporate-at-all-costs, anti-government lobby to stop even the most moderate attempt — a measly $125 million dollars raised per year by M 67 — to redress the state's tax unfairness, illustrated by this, from Oregon Center for Public Policy:
That's current policy, based on 2007 income levels, and without passage of M66/67. If they pass? The "burden" for the Top 1% will increase — to 6.6%. Ouch. (Notice the role of the the Federal Deduction Offset, which provides big relief — to the wealthy. Another topic for another day.)
We know two things for certain about the current recession: It will continue for at least another year here in Oregon, regardless of what we do; and hundreds of thousands of Oregonians will continue to rely on services provided by the state for even a modicum of relief. Measures 66 & 67 provide a bandaid to the gaping wound that is our economy, but that is far better than the knife attack that a No vote would represent.
And as the No campaign is so fond of saying, the numbers don't lie. They don't. Oregonians wealthiest are doing just fine, thank you. They can easily afford Measure 66. And if anyone truly thinks a tax bump for $15,000 is going to cost a single decent job, then no amount of fact will suffice for them.
And if you have friends still wavering about how to vote, direct them to Manning's report and see just how sorry they feel for those who have the most — and continue to get more.
 |
More Recent Posts | |
Albert Kaufman |
|
Guest Column |
|
Kari Chisholm |
|
Kari Chisholm |
Final pre-census estimate: Oregon's getting a sixth congressional seat |
Albert Kaufman |
Polluted by Money - How corporate cash corrupted one of the greenest states in America |
Guest Column |
|
Albert Kaufman |
Our Democrat Representatives in Action - What's on your wish list? |
Kari Chisholm |
|
Guest Column |
|
Kari Chisholm |
|
connect with blueoregon
Jan 25, '10
do you have any data about how this compares to the rest of the US? context seems important here
Jan 25, '10
@allan
The entire report with all 50 states is here
You are right, context is important.
10:45 a.m.
Jan 25, '10
Oregon's tax structure is more progressive (or less regressive) than the state and local taxes in most of the rest of the country because we don't have a general sales tax.
While I could quibble with some of these numbers (the allocation of property tax burden is notoriously difficult to make) what this basically shows is that if you look only at income and property taxes, the tax burden is somewhat progressive. It is the sales and excise taxes that make it regressive, although to a lesser extent than most states.
I also believe the total tax system tends to become somewhat progressive when federal taxes are included, although FICA offsets much of the progressivity of the income tax.
Jan 25, '10
Given that property taxes are the biggest factor for the regressive nature of this report, does anyone have some details on the methodology they used, especially in re: renters
10:55 a.m.
Jan 25, '10
Jack, you are not the only thoughtful Republican left in Oregon. we really need to address Oregon's tax structure which helps absolutely no one except those with enough wealth to avoid being touched by the real world at all. something on the level of a constitutional convention would be great, but it's probably not feasible. so we're probably stuck with piecemeal attempts, each of which will be fought hammer-and-tong like this measly little measure (i mean, $125/yr? the Yankees pay their frikkin team more than that!). the Kicker is up first. but we could really use an across-the-board "summit" or something to stabile our revenue structure. everyone would have to compromise, however, so the possibility of doing something substantial in this way is probably non-existant.
Jan 25, '10
Jack, property tax includes people who have lived in a home for maybe 30 years and are now retired.
Bruce Bartlett has written a new book called New American Economy where he says Supply Side economics has in common with Keynsenian economics that there was a time and a place where they were successful but not in every situation. The subtitle begins How Reaganomics Failed.
We need to change the mentality in this state. Fund sweeps and "don't worry--if we don't have the revenue we still won't need budget cuts" (current GOP mantra) will not stabilize the Oregon's budget and tax structure.
One reason I voted yes (there were many) was to show Republicans that "tax cuts solve everything" is not alone a winning strategy.
We need INTELLIGENT Republican input into this debate. Max Williams, Ben Westlund, Lane Shetterly tried to provide that back in the Minnis days and they all ended up leaving the House for other jobs---was the heat on them for "heresy" too great?
Jack, that was a great column you wrote in the Oregonian. We need more debate like that. But as long as the Minnis/Scott/Russ Walker mentality controls the GOP, even trying to have an intelligent debate will be an uphill battle.
My Republican state rep. yelled THESE ARE BAD TAXES at me (face to face conversation) regarding 66 & 67.
Can we at least agree that was stupid politics and gave me a story to tell along with "where was the alternative?" regarding the brainlessness of much of the ballot measure debate?
Jan 25, '10
MP97303 Thanks for posting that link. Oregon's tax structure is more progressive than most states. Our neighbor, Washinton is the least progressive in the nation. Washington is a great place to live for tax purposes if you are rich. Interestingly, we seem to capture a decent amount of the poor's income through sales and excise taxes. I assume a decent amount of this is optional taxes (i.e. sin taxes on beer and cigs.) Obviously, states compete amongst themselves to attract business and residents. I question if Oregon is winning this competition? Would we rather Bill Gates move here or an unemployed drywaller? A case can clearly be made that our Nation's tax code should be more progressive, but I think tackling income inequality through the tax code is something best done on a Federal level. I think if a state attempts it there is a good chance that high income earners will simply decide to live somewhere else and that is not a good thing.
Jan 25, '10
Sounds like it's time to go back to the "good old days" when we had a 90% top marginal tax rate.
11:43 a.m.
Jan 25, '10
I'm with Jim H. All this pissing and moaning about supposedly high taxes on the wealthy and how supposedly that kills jobs. It all flies in the face of 20th Century American history. Our nation's economic "golden age" was in the midst of far higher taxes on the wealthy than are being proposed by ANYONE now.
Jan 25, '10
Better yet the good old days when the nation had no income tax. We really did not have an income tax in this country until about 1913.
Jan 25, '10
Yeah, the more things change, the more that's all we're left with after paying the bills.
Jan 25, '10
TA,
About your suspicions re: the timing of this "reminder" article on the huge income inequalities in Oregon--we could suspect that the article was finally released one day before election day because that will be a little less indefensible to the public than if the O had held it until after the election was over . . . .
Jan 25, '10
If I were rich and could live anywhere I wanted I would base my decision on quality of life not on a fraction of one percent tax difference.
Jan 25, '10
Oregon's tax structure is more progressive (or less regressive) than the state and local taxes in most of the rest of the country . . .
It's not "more progressive" -- it's "less regressive."
If a poor person pays a higher overall tax rate than a rich person, the system is regressive.
True, poor people may be worse of in other states, but that doesn't mean Oregon is on the right side of things.
The fact that it's drizzling outside, rather than pouring, doesn't mean that it's "dry" outside. It just means that it's "less wet."
Jan 25, '10
then address property taxes, b/c they are the issue, not income taxes.
Jan 25, '10
Lucas commented: It's not "more progressive" -- it's "less regressive."
Actually, either reference is correct - and both are commonly used because they're comparative references.
If a 'rich' person pays a higher overall tax rate than a 'poor' person, then the system is said to be progressive.
If the tax rate rises more rapidly with income in State A than in State B, then State A's tax system is 'more progressive' than that of State B.
We're comparing relative rates of taxation vs income in one state versus another, not the weather conditions between the two states.
Jan 25, '10
The Federal Deduction means a lot to charities in Oregon as well. There are many on my personal list who will suffer if Measure 66 passes. Let's hear it for a sales tax. Just 2%.
Jan 25, '10
Alcatross -- you're wrong.
A progressive tax system is one in which a rich person pays a higher tax rate than a poor person.
A flat tax system is one in which pay the same rate.
A regressive tax system is one in which the poor person pays a higher rate than the rich person.
Poor usage of the word does not make it otherwise.
Jan 25, '10
Yes, and Warren Buffett talks about the tax he pays vs. the tax his secretary pays. Hardly an "anti-business" guy.
5:13 p.m.
Jan 25, '10
Patrick: i was referring to the state office that produced the report, wishing they'd put it out earlier. Manning's report for the Big O was excellent; i had no suspicions about him sitting on it.
mp, you are ok with a tax cut (no on 66) for the richest Oregonians and oppose 260,000 unemployed Oregonians getting a tax cut (no on 66). thanks for making it clear who matters most to you.
Jan 25, '10
Obama on ABC News today tells Dianne Sawyer:
"I can guarantee that the worst thing we could do would be to raise taxes when the economy is still this weak."
Jan 25, '10
mp, you are ok with a tax cut (no on 66) for the richest Oregonians and oppose 260,000 unemployed Oregonians getting a tax cut (no on 66). thanks for making it clear who matters most to you.
t.a never learned the problem with making assumptions, and ill-informed ones to boot. I have said quite often and in plain English on this site: I support M66 and VOTED YES ON M66. Jackass!
6:21 p.m.
Jan 25, '10
mp, my apologies. too much politicking; whoever that should have been addressed to, it wasn't you. i apologize for not taking notes on your comments; that is obviously step in not being a jackass. i have begun a database to track your important commentary so you won't be forced to call me a name in the future when i make a mistake.
sheesh.
Jan 25, '10
ta, aparently merely making money amounts to rationale for paying higher taxes according to your post. Uh; NOPE doesn't fly.
Also, voting no on 66 doesn't give a tax cut any more than it denies a tax cut to those on unemployment. The dems in Salem were cynical and calculating when they purposely placed the FEDERAL TAX break for unemplyment in with legislation raising taxes. They could have done it several other ways. Heck, like many other states they could just mirror Federal tax code.
Jan 25, '10
“It is better to keep your mouth shut and appear stupid than to open it and remove all doubt.” -- Mark Twain
Jan 25, '10
MP, thank you for voting yes on 66.
Sometimes when measures are lumped together, the voters in their wisdom vote yes on some and no on others.
In a little over 24 hours we can dissect election results and end the rhetoric and the debating of theories.
7:57 p.m.
Jan 25, '10
was that something you were going to practice yourself, mp?
Jan 25, '10
LT
Had they simply moved to raise the tax rate of businesses as well, I would have voted for that too. In my opinion, the YES side made a mistake trying to portray businesses as "evil" All that did was piss off a lot of hard working, middle class entrepreneurs.
Jan 25, '10
t.a.
You are right. I am sorry for calling you a name. I am just getting a little tired of people implying what my beliefs are just because you disagree with my pov. You, unfortunately, came along at the wrong time and I reacted poorly. I am sorry.
8:33 p.m.
Jan 25, '10
Jack Roberts is among those who have a hard time admitting that our state and local tax system is, like every other state, regressive. Jack and other deniers say it is "more progressive" than other states, though Jack apparently knows that's not so so he puts in parentheses "less regressive." Calling a less regressive tax system "progressive" is like saying because Oregon's foreclosure rates are lower than many states, the housing market is healthy here. Or a coal mining state with no accidents in one year saying that coal mining is safe in that state. Jack, don't try to paint our tax system as progressive, when it isn't.
As to allocating property taxes, the ITEP model does it the way Texas and other states do it when it comes to renters.
8:44 p.m.
Jan 25, '10
that's cool, MP. i usually double check the thread before posting anything that direct. needlessly careless. thanks for voting Yes on 66. and we need to fix the whole tax/revenue system here in Oregon. step #1: massive citizen education effort. why what we have cannot work any longer (stopped working long ago).
Jan 25, '10
With most people starting with nothing of course the gap grows. Those with more means at every level do more and grow proportianatley.
Isn't the rich getting richer exactly what the system should do?
The endless stream of stories of Americans going from nothing to success, riches and paying the vast majority of all taxation is an American success story.
Yet with nearly 50% of Americans not paying any taxes at all it's not enough?
There's that darn gap. It's not fair.
We need social justice.
Jan 25, '10
I enjoyed watching t.a. and mp pull out the straight razors, slash each other's tinkertoys and tire swings, but stop short of actually joining in personally-damaging battle. That was well done, gents.
I'd still be married to that lunkhead ex of mine had I/we an ounce of that razor-totin' wit you just showed. Instead of bruises and bones hurting, happily ever after.
I hope I can pull up short when it's my turn again.
Anybody know what the current score is viz return percentages? Last I heard the bluest counties were still horribly and unaccountably behind in numbers voted.
Jan 25, '10
Ricky- The federal government does not have to balance its budget. They can run a deficit. States cannot. You're comparing apples and oranges.
Jan 25, '10
Chuck- For the most part economic life is regressive. The poor pay a higher percentage of their income for food, garbage collection, electricity, etc.
Jan 25, '10
Kurt: the reason the legislature acted as they did is because they knew that no matter what sort of tax increase they came up with, it would be referred to the ballot by anti-tax zealots. Experience has taught them that the voters won't pass a tax increase on the middle class; so they crafted this one with targeted increases on those who can afford to pay more-- those on the favored side of the widening income inequality gap. Polling showed them (and still shows us) that they were right: a large majority feel that the wealthy aren't paying their fair share of taxes, and should pay more. However, anti-tax conservatives are much more inclined to vote than everyone else, and many people are tricked by sleazy political ads on television; so the outcome of this election is anybody's guess.
Jan 26, '10
Well put, Lucas! I couldn't fail to disagree with you less.
rw, mp's a she. Wasn't enough testosterone to reach critical mass. (Not a comment on you and your ex).
Jan 26, '10
Zara
Hate to burst you bubble, but I am a he, with plenty of testosterone. Simply raised too well to continue with such a childish display of name calling.
Jan 26, '10
Sorry. My bad.
Jan 26, '10
Zaree? I think he just waved something at you. It warn't a flag.
And where'd you come up with a triple negative algebraic yes-equation? That was pretty.
Jan 26, '10
As for my execrable ex, I mean it when I say "bless his heart". It's too sad to take joy in.
:)... so I spoze I'm glad I did not learn the finer art of returning fisticuffs.
Outa There is a much better story than a number nine frying pan vying with a railroad tie (one of the family's cherished "ma beat pa right back when he started it" stories.... heh. Looooooove country life).
<h2>And how aBOUT them returns? I feel as if I can breathe again. It was an important piece of business.</h2>