In regard to “Legislators brace for fight on taxes,” in The Bulletin’s edition of March 31:
The reporter writing of Democratic plans to raise $275 million in taxes focuses on funding options; e.g., changes to PERS, targeting individual tax breaks and capping individual deductions.
However, she does not mention several tax-break bills exceeding $275 million proposed by Republican legislators. Two of the bills are estimated to cost up to $680 million in tax breaks for corporations and the wealthy. The other two await loss revenue analysis. Oregon is struggling to fund K-12 schools and legislators bring tax-break bills?
SB 593 cuts the capital gains tax rate in half to 4.5 to 5 percent. Estimated revenue loss is $432 million for the 2013-15 biennium and $480 million for the 2015-17 biennium. The bill is sponsored by Sens. Olsen, Knopp and Thomsen.
SB 594 expands bonus depreciation tax breaks for businesses. There was no hearing, so the revenue loss unknown. The bill is sponsored by Sens. Olsen, Thomsen and Knopp.
SB 595 cuts the corporate minimum tax rate to $150 for certain “C” corporations, regardless of size, and decreases the corporate excise tax rates. The current minimum tax is based on sales volume of up to $500,000 with incremental increases up to sales volume of $100 million. No hearing has been held and revenue loss is unknown. Sponsored by Sens. Olsen, Thomsen and Knopp.
SB 671 raises the estate tax exemption from $1 million to $5 million. The $7.5 million exemption for natural resources, working farms and ranches remains. This proposal was presented as Ballot Measure 84 in the 2012 election and was defeated with 54 percent statewide. In 2011, 1,100 estate tax returns were filed, each with value of million or less. An additional 65 estate returns of $5 million or more were filed and subject to tax. If SB 671 passes, revenue loss is estimated between $100 million and $200 million per biennium and overturns the 2012 vote. Sponsored by Sen. Knopp, 10 additional senators and 22 representatives. All Republicans.
HR 3352 is not a tax break bill, but benefits the bottom line of select companies. This bill exempts factory and manufacturing establishments from paying their employees overtime wages. Workers covered by a union contract are protected. At a time of high unemployment and stagnant wages, enacting such a draconian provision shows a callousness befitting 19th-century England. Sponsored by Reps. Johnson, Hicks, Smith and Thompson.
Oregon’s 2011 median household income of $46,816 and a per capita income of $25,228 is evidence this is not a wealthy state. It is a state where residents care about their schools, the environment, infrastructure and living wage jobs. An Our Oregon website chart of tax giveaways for 2009-13 shows an increase of 29 percent for that period. It is estimated the state will give away $36 billion in tax breaks this budget cycle. An OregonLive Internet post reported The Oregonian found 211 tax breaks on the books in Oregon. Analysis of 32 of the 211 showed “... ‘tax expenditures’ representing $1.3 billion in lost tax money and found about half went to the upper fifth of the income scale.” All the while, Oregon faces overcrowded classrooms, shorter school years and teacher layoffs.
Lawmakers should carefully analyze tax-break expenditures and selectively eliminate. Shelve proposed tax-break legislation before reducing PERS pensions, or removing individual tax deductions for medical, home mortgage and property tax expenses that will adversely impact median income folks.
For 30 years, government — at all levels — has functioned with “trickle down, starve government” economic directives: levy no new taxes; grant tax cuts, tax breaks and tax loopholes; legalize tax havens and permit additional tax benefits to companies moving operations and jobs offshore. Corporate subsidies, financial industry bailouts and mergers win approval. The resulting economic collapse has millions in distress, cities and states teetering on the brink of bankruptcy and a country falling into ruin. Undeterred, ideologues march on — demeaning unions, public sector employment, unemployment insurance, food stamps and Medicaid — then brazenly propose more tax breaks.