It’s official. Come this January, voters in Oregon will decide, via ballot initiative, whether to keep in place two major tax reforms – one raising the income taxes paid by wealthy Oregonians and the other increasing the taxes paid by large corporations – that were adopted in July to help close the state’s yawning budget gap.
While the initiative’s backers (that is, the anti-tax activists favoring repeal) assert that the pair of reforms will damage Oregon’s economy, a recent report by the state’s Legislative Revenue Office finds that using spending cuts to make up for the $733 million in revenue that would be lost if the reforms were repealed would actually be worse for the state’s economic prospects.
This conclusion is echoed in a letter signed by three dozen Oregon economists, who argue that the Legislature’s efforts to “balance budget cuts with tax increases targeted on corporations and high-income Oregonians while maximizing receipt of federal dollars to fill a $4 billion shortfall was, from an economic perspective, a prudent course of action.”
Moreover, a study released earlier this week by the Oregon Center for Public Policy reveals that, while the recent reforms were extremely progressive in nature, they will still leave the very richest Oregonians paying less in state and local taxes, relative to their incomes, than poor and middle-income residents.
For more on the very different attitudes some affluent Oregonians have towards recent tax reforms, see this revealing piece from Oregon Public Broadcasting.