Pete, Do you think Oregon needs a state sales tax?

Good question, Prof!

Either Pete supports SB 382 by the quartet of Westlund and 3 others, or he doesn't.

As an article on SB 382 which someone sent me says,

Westlund was joined in sponsoring the bill by Sen. Kurt Schrader, D-Canby, co-chairman of the budget-writing Joint Ways and Means Committee, and Reps. Bob Jenson, R-Pendleton, and Mark Hass, D-Beaverton.

The measure would, said Westlund, cut income taxes in half – and cut capital gains charged to businesses in half, as well. It would reduce property taxes and impose a 5 percent sales tax, “exempting the usual suspects: food, medicine, education and housing, and three things we already have consumption taxes on, gas, tobacco and alcohol.” <<

It is good to support a better commission structure for lottery retailers, but that is not the whole answer.

And as a fan of St. Senator and Ways and Means Senate Chair Schrader, I wonder if Sorenson is speaking about Schrader when he says "Our political leadership seems paralyzed by distrust and self-doubt."

We need to have a serious discussion about the budget and tax structure in this state, and nothing will change until we do.

This is another quote from that article:

If someone doesn’t like this proposal, either give me a better one, or defend the current structure. Sen. Ben Westlund R-Tumalo <<

My definition of leadership involves taking Ben Westlund up on his offer.

If Sorenson can't either support SB 382 or come out in favor of competing legislation (does any exist at this point?) then he shouldn't be talking generally about "leadership". Anyone can say "But the Gov. should..." or "But the legislature should...". It is harder to say "I support the move to...".

And not everyone thinks supporting a union in a local strike is reason to elect someone governor, esp. after some high handed unions who claim they supported certain Republican incumbents for their voting record and no Democrat should have supported the Dem. challenger in those races. I remember a debate in the late 1980s on the Democratic State Central Committee. Some union people who held posts (like committee chair) at the state Democratic level stood up with their unions and voted to endorse Republicans. Other union and non-union people wanted the reaction to that spelled out as "you made your choice--when you voted to endorse a Republican you gave up the right to hold office in the Democratic party". I was amazed at how many union people who had been at the AFL CIO convention were angry about that.

I don't recall Sorenson being active in party politics back then.

It may be a fine thing to be helping a union as he says.

In Lane County I'm strongly backing the Lane Transit District drivers and their union in their struggle against the unilateral implementation of an unfair, un-family friendly contract.<<

But I don't see that as a reason to oust an incumbent Democratic governor. And that is Sorenson's sale to make: "vote for me in the primary because..". So far his sales pitch seems to be "I don't like Kulongoski, so you shouldn't either". Well, Pete, trust is earned, not demanded!

I don't support candidates who seem more interested in telling us what other people are doing wrong, rather than spelling out what they would do differently.

Pete- I think we need to compare our mid 90's bank statements to verify which of us had the distinction of being the poorest senator in either party during service together in the state senate.

Although we would be close, I am thinking I would win that award.

Hello Blue Oregon,

Hi, this is Pete Sorenson, Democratic Candidate for Governor. I'm enjoying the discussion here on Blue Oregon. It's too bad that Kevin Mannix or Governor Kulongoski don't get involved in these types of discussions. I hope they do.

No, I'm not supporting sales tax proposals being discussed in the Legislature. I favor progressive income taxation. I don't think it's fair that people who make $50,000 per year pay the same 9 per cent rate as people who make $500,000 a year (or even $5 million). I am particularly concerned that the per centage of taxes paid by corporations has declined so substantially. I want to urge readers here (and everyone, for that matter) to take a hard look at the "tax expenditure report." That report makes clear that Oregon could get the revenue it needs by simply closing the many loopholes available to higher income earners and corporations. I particularly admire the work of Rep. Jeff Merkely (D-Portland) on that topic. Speaking of corporations, I especially like the idea that Senator Floyd Prozanski (D-Eugene) has to increase the minimum corporate tax in Oregon. Can you guess what the current minimum is? It's $10, but that amount wasn't even paid by Enron when it owned PGE.

I had a great time in the Oregon State Senate and I enjoyed the work I did with former Senator (now Portland City Commissioner) Randy Leonard. I'll say that Randy was almost as poor as me. Our voting records there were almost identical as I recall. I want to specifically compliment Commissioner Leonard for his work on getting PGE into public ownership. For my work on that topic, please contact www.petesorenson.com

I'll see if I have time to respond to other posts here.

Pete

Pete Sorenson Democratic Candidate for Governor

Did I just read that a candidate for governor of Oregon is on record supporting public ownership of of PGE?

and hello, Pete.

Do I understand that Pete wants to examine the Tax Expenditure Report and raise the Corporate Min.Tax? Fine, but will that come up with the money to balance the budget? And how do you intend to get that thru the House? Have those ideas been introduced as bills?

Yes I know the Democratic arguments against a sales tax, and have the battle scars to prove it. In about 1985 there was a state central comm. vote on whether to establish a "no sales tax committee". The vote was 25-19. There were legislators in the 19 and supporting that side of the debate. We 19 state central comm. members were all called "not real Democrats" and "the infamous 19" for not joining the anti-sales tax crowd. And then they wondered why we wouldn't work in a State Fair booth that year flying a "No Sales Tax" flag--and why we said "You folks told us we are not real Democrats, so get some real Democrats to work in the booth".

But the challenge still stands: Will Pete give us the bill # of what he supports? Given the tax breaks envisioned to help(deservedly, in my book) military families, who has introduced legislation to repeal tax expenditures? Should every tax break be eliminated or are some worthwhile? This is what Pete said:

That report makes clear that Oregon could get the revenue it needs by simply closing the many loopholes available to higher income earners and corporations. I particularly admire the work of Rep. Jeff Merkely (D-Portland) on that topic. Speaking of corporations, I especially like the idea that Senator Floyd Prozanski (D-Eugene) has to increase the minimum corporate tax in Oregon. Can you guess what the current minimum is? It's $10, but that amount wasn't even paid by Enron when it owned PGE.<<

One more thing--I am glad there is none of the Mannix sarcasm on this blog, and I think the sitting Gov. has more important ways to use his time.

But if Pete really wants conversation about issues, he should set up an "online town hall" on his site the way Ted Kulongoski did in 2002. That was an extremely well designed site.

And if he wants to invite Mannix to write an opinion piece for that site which we could all critique, fine. Let's see if either Kevin or Peter really wants to discuss details or just generalities.

But are there no Republicans other than Mannix contemplating running for Governor? That is hard to believe.

Hi,

This is DIana Abernathey, Campaign Coordinator for Pete Sorenson for Governor. Pete asked me to pass along a few comments:

1). I know that Rep. Jeff Merkley's is spelled Merkley. Sorry that I misspelled it.

2). Let me give you another example of why I think we don't need to change the rate of individual Oregon taxpayers who earn under $250,000/year. PGE collected over $100 million/year from Oregon rate payers so they could pay state and federal taxes. This was included on the rate payer's bill as a state and federal tax. Yet they paid no taxes to any government, let alone Multnomah County or the State of Oregon. If we had received the money that was paid for taxes, we would have over $600 million dollars available to put into Oregon schools. That is an example of the kind of thing I would like to do - close corporate loopholes. Here the loophole is the utility is allowed to collect the taxes from the rate payers even though they don't pay the taxes. Who gets to keep the taxes? PGE/Enron got to keep the taxes. I don't think that's fair. And why hasn't the current governor put a stop to this unfair practice and loss of state money?

Pete Sorenson Democratic Candidate for Governor

If you want to understand me, look at my record in Salem: pro environment, pro education, pro senior, pro regular taxpayer, pro child, pro civil rights, pro civil liberties, and pro people.

If Democrats ever think that they don't have a strong message, you've summed it up perfectly right here. These are the exact reasons why I'm a Democrat, and if you are the only candidate with this message, you will immediately win the support of the Young Democrats of Oregon.

Jenson YDO Chair

<r>One thing missing in this statement that would cure much of the State's budget woes...jobs. Any candidate needs to address that and it's something the Governor has been woefully absent on to this point.

Jim,

With the fiscal crisis and education crisis, trying to get jobs is a mute point. We do not need to exacerbate the fiscal and education crises with giving tax credits for corporations that will not make a huge impact on the unemployment numbers. I think that the governor’s job is to get “the house” in order by getting all the “negative” things off the books. As such: sunset all tax credits that do not have direct benefits equally for the state overall, make the process of doing and having business more friendly in the state, enforce statutes that would make a more stable fiscal picture for the state, and properly fund schools and public safety programs first and foremost.

Question for Pete -

What would you think about a gross receipts tax on business instead of a sales tax? GRT taxes a broader base (all business transactions instead of select retail sales), and the tax is paid as an expense by the business instead of an add-on by the buyer. Because of the broad base, it could be a pretty low rate, maybe 2% instead of 5% like the sales tax.

I can see some fairness problems here, like taxing the gross revenue of businesses that lose money, but that can probably be addressed with exemptions.

If a GRT is coupled with personal income tax cuts, it shifts the tax burden from individuals to business. Also, it's a "third leg" in the tax stool that isn't a nine-time loser with the voters.

Anyone have thoughts on this?

Jenson, Because this is Blue Oregon, not some campaign. This is where we can have serious, careful, in depth political debate. That's why I'm here. I've learned more in following six months of discussion on BO than I have in reading years of the Oregonian and WW.

I hope the folks here aren't satisfied with tag lines and stuff that, with all due respect, smells like you just pulled it out of there.

Exactly how does a Gross Reciepts Tax work and how is it different than the "equal tax" that was on the ballot awhile back? Implementation is a consideration--look at what a problem CIM/ CAM turned out to be although they looked good to many the year they passed--and were passed with the best of intentions.

As I understood that "equal tax" proposal, a farmer growing potatoes paid (and did paperwork?) when selling the potatoes to a processing plant. Then the processor paid (and did paperwork?) when the bags of frozen potatoes --tater tots, french fries etc--were sold to stores like Costco or other major retailers. In some cases there would be another layer--distributors. I knew some young women who worked in a big box store and were arguing about that "equal tax" measure. They asked me what I thought and I went thru the above scenario ending with "and which of your friends at the store would process the paperwork for the equal tax portion the store paid when buying the frozen potatoes from the processor?". The young woman who had been leaning towards voting for it said something like "Gee, never thought of it that way", and ended up voting against it. That isn't an issue of liberal or conservative (and women in their 20s are not old enough to have voted on the sales tax 9 times), but of ordinary voters debating a ballot measure among people they know. More political decisions are made in conversations among people who know each other than ideologues or political consultants realize.

Whatever problems anyone has with sales tax (and I spent my college years in a sales tax state), a GRT will never sell unless the above questions can be answered and the folks who do the paperwork are brought on board.

Imagine the very small businesses (people who sell homemade jewelry, cards, have summer fruit stands or sell at farmers markets). If GRT requires them to do more paperwork, how do you get the public to support it?

Pete,

I'm sorry but your previous replies are not specific enough for me. When I see reports that Oregon's state revenue system is rated as one of the worst in the country by Governning magazine, I don't think the standard "close the loopholes" is going to cut it. I'm disappointed that you can't support a sales tax but I recognize the political realities in the state.

What, specifically, do you propose to change with respect to the progressive tax rates? Would that raise sufficient revenue to resolve the current and medium term budget crisis? And how would that solve the long-run instability in a tax system based on income alone?

Second, I have not read the tax expenditure report (though I've skimmed the charts). Are you arguing that there are enough expenditures that you would eliminate to cover the current revenue shortfall? Do you think that would pass the legislature?

LT -

Reasonable questions about GRT. I assume a GRT would be like an income tax in terms of collection -- instead of doing "per transaction" paperwork you total your gross income for the entire quarter or entire year, multiply by .02 or .025 or whatever the rate is, and write a check. Since all businesses keep track of their revenues anyway (or at least they're supposed to) it doesn't add very much paperwork at all. I don't think the buyer would be responsible for any paperwork at all.

As I understand it, GRT is kind of a hybrid income tax and sales tax -- it taxes gross receipts (sales of goods and services) instead of net income, but it's a flat tax like a sales tax instead of progressive like most income tax proposals.

You raise a question I hadn't though of -- if someone out of state sells to a buyer in Oregon -- say an Idaho potato farmer sells to an Oregon frozen french fry packager -- should the Idaho manufacturer have to pay Oregon GRT? I would think no, because the sale wasn't in Oregon.

IIRC, part of the problem with the equal tax was that it was written to apply every time money changed hands, possibly including things like loans, bank deposits and ATM withdrawals. There was a big confusion factor there. I don't think deposits to banks would qualify as a "receipt" because the money doesn't really belong to the bank; they're just borrowing it from the depositor. Same goes for a business loan -- if a small business borrows money, it isn't really a "receipt" because the business doesn't own the money yet.

The problem with proposals not yet spelled out is the "I assume..." and "as I understand it..." factor. I remember once asking a ballot measure advocate "But would your measure contain a provision for...?" and being told "I should hope so!". I decided at that moment that the measure was not well enough written if an advocate merely hoped it would address a situation in a particular way.

That is why I prefer laws over ballot measures--the ability to have hearings which spell out the details rather than the hope of sponsors that it would do something.

I discovered some time ago that "flat tax" advocates didn't have the details spelled out. Whenever someone would ask me what I thought of the flat tax, I'd say "You tell me if it includes withholding or just expects everyone to write a check for the amount of the flat tax, then we can talk".

The most common response was "Good question".

More and more, I'm finding Pete Sorenson's responses to be very specific and thorough, especially when you can talk with him in person, which I hope everyone on BO gets to do in the next few months. He's unlike any other politician I've ever heard or met. He and his 30 year record of standing and speaking up for poor and middle class people and our quality of life in Oregon is pretty unique, and specific.
For instance, how many leaders do you know who took action and filed a series of lawsuits to protect water quality, and won, like Pete did in the case of the Bull Run watershed, which provides Portland's drinking water? Here's a quote from an NY Times Magazine story, "Drinking Water Comes to a Boil", Sept 26, 1993 - "What finally forced the E.P.A. into action was a series of lawsuits brought by the Bull Run Coalition, a citizen's group in Portland, OR,named for Portland's mountain reservoir. Bull Run began to take the agency to court virtually every time it missed a Congressionally imposed deadline. 'We have an inventory of the excuses we've heard from E.P.A. lawyers over the years,' says Peter Sorenson, an attorney for the coalition. 'They've told us: "We didn't know we had to do it." "We don't agree that we have to do it." "We don't have the money to do it." "We don't have the time or energy to do it." Bull Run has won or settled every drinking water suit it brought against the E.P.A. The result is that of the 83 standards mandated by Congress, almost all have now been regulated or are in process, and more are underway." Pete gets things done. He studies, debates, discusses issues so he understands them all the way through, and then is able to talk about them succinctly so that we all gain from his study. He's clear about what his stand is, and respectful of others'. I have no doubt he'll do the same with sorting out the tangle of the tax issue. As they say, the impossible will take a little while. He's just getting started on this one.

Hello Blue Oregon,

Always good to take a few minutes away from my other work and jump on here. This discussion is really valuable. Here are a few more responses:

1) I favor public power. I live in an area with two well run municipally controlled power agencies and variety of PUDs and rural coops. I've worked on public power issues in the United States Congress (when a Republican Administration tried to end the preference clause for publicly owned utilities in the Northwest) and I also worked for the Secretary of Agriculture in the Carter Administration when there were attacks on the REA (Rural Electric Administration). Public Power is the way to go: the rates in Oregon are 25 -30 per cent lower. That's why I oppose the Texas Pacific takeover of PGE.

2) On the tax expenditure issue, there are plenty of ways to get the revenue without raising individual income taxes. To plug corporate loopholes or high income tax deductions, it takes courage and significant effort. I am willing to work toward funding Oregon's children and their education and I am willing to fight for the money to make that happen. Let me give you just one example of how the public is fleeced: PGE gets to collect taxes for the federal government, the state government and Multnomah County government. Even though they have collected the money as part of the rate, they haven't paid over $600 million to any government. In short, we should collect that money for the benefit of our people.

3) I like the idea of an on-line town hall meeting. Could someone out there help me put that together?

4) Joey asked me about the kids: Jennifer is a junior at the U of O and studying children (particularly adoptive children) and Erik is a freshman and he's playing a lot of soccer. His former team, the South Eugene Axemen, were co-state champions a few years ago.

5) There are three candidates for governor: me, Governor Kulongoski and Kevin Mannix. I see in the newspaper that the Governor's campaign is heavily favored by corporations.

6) Back on taxes, I think there is a lot of good work going on in our state by people who are concerned that the Oregon Department of Revenue isn't collecting the taxes that have been levied. In other words, there are a lot of people who are underreporting. Email the group, Tax Fairness Oregon. Their email is [email protected]. I'm sorry I don't know their website but I have visited with representatives of this group and they sound like good people to me.

7) On the gross receipts tax idea: I didn't support the 2 per cent "equal tax" because it was pretty complicated. I would be willing to further investigate both a gross receipts tax and a carbon tax. On the latter topics, I have visited with State Representative Paul Holvey (D-Eugene) about getting the discussion going in the legislature on the need for reductions in greenhouse gases.

8) Keep up your good work. I will do the same. Let me know if you want to do a "meet up" as I will be in Portland on Thursday, February 17 to meet Howard Dean.

Thanks,

Pete

Pete Sorenson Democratic Candidate for Governor

"It was impossible, so it took a little longer to accomplish." --Wally Byam

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