A choice that isn’t on the table

October 6, 2010

When Oregon's main newspaper published an article about the "hard choices" ahead in balancing the state budget, Adam Sanchez responded with a simple proposal.

WHAT IS most telling about the recent article in The Oregonian, headlined "Hard choices: Something must give in Oregon's budget," is the simple choice that isn't on the table. What the authors of the article choose to ignore is that we don't have a deficit problem in Oregon, but a revenue problem. We have a problem of politicians refusing to tax the rich and corporations.

What is unfortunately absent from the entire debate on Oregon's $3.2 billion shortfall is the simple fact that one Oregonian, Phil Knight (net worth: $10.2 billion) could pay for our entire budget shortfall and still be a multi-billionaire!

Let's not forget that despite the recent passage of Measure 66 and 67, Oregon still has a regressive tax system. Oregon is one of the few states that assesses income tax on the wages of families living below the poverty line. As the Oregon Center for Public Policy explains, "The lowest-income Oregonians currently pay 8.7 percent of their income in taxes, the highest share among all income groups...The wealthiest 1 percent--households with income in excess of $410,000 and averaging over $1 million--pay only 6.1 percent of their income toward state and local taxes."

Nike co-founder Phil Knight
Nike co-founder Phil Knight

With the passage of Measures 66 and 67, the percentage that poor Oregonians pay in income tax remained at 8.7 percent while the wealthiest 1 percent saw an increase from 6.1 percent to 6.6 percent. Yet this small increase in taxes on some of the wealthiest Oregonians garnered $472 million in new revenue. Imagine if we simply taxed the wealthiest 1 percent at the same rate we tax the poor.

Or what about taxing corporations a bit more? While "Hard Choices" did mention "kicker" reform--a common-sense tax revision that would garner $42.3 million in the next budget period from mostly profitable out-of-state corporations--why not raise tax rates on corporations in general?

After all, following the national trend, the state has slashed at corporate taxes over the last 30 years. According to economist Michael Leachman, "In the fiscal 1973-75 budget cycle, corporations [in Oregon] paid 18.5 percent of all income taxes. In the...2005-07 budget cycle, corporations are expected to pay just 4.6 percent of Oregon's income taxes."

Yet as another OCPP reports point out, corporate profits in Oregon have grown nearly eightfold since the late 1970s. On top of all that, 40 of the 49 corporate income tax breaks written into the state tax code were enacted after 1980. So why is there not a single politician calling for the closure of those loopholes and telling us how much revenue that would bring in? It is important to remember that with the passage of 66 and 67 we only moved from having the third-lowest to the fifth-lowest corporate taxes of any state in the nation.

But while these solutions will seem pretty reasonable to any Oregonian suffering from the Great Recession, they aren't mentioned in the media, and "both major candidates for governor, Republican Chris Dudley and Democrat John Kitzhaber, have called for cutbacks."

What this means is that no matter who is elected in November, we will need to build a mass social movement to prevent politicians from balancing the budget on the backs of working people. We should learn from the actions against austerity that are taking place across Europe. We should not fall into the trap of calling for sin taxes or sales taxes that disproportionately hurt the poor.

While big business and the wealthy benefited from the neoliberal boom of the last 35 years, workers' wages stagnated and in some cases declined. This is why Oregonians voted for Measures 66 and 67. If the majority of us didn't benefit from the boom, why should we have to pay for the crisis? It's time we turn the hard choices we've been presented with into one simple choice: tax the rich.

First published in The Oregonian.

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