Vote NO on Oregon Ballot Measure 59
As many of you know, I am a tax accountant, and I have spent many years giving tax advice and preparing tax returns for a wide variety of people and businesses. Among them have been the very rich and the very poor. I am always looking for a way to make the tax bill lower at the end of the year.
This is why I was initially enthusiastic about Oregon Ballot Measure 59. Currently, a taxpayer is allowed a deduction from income on their Oregon Income Tax Return of the amount of their Federal Income Tax bill, but that deduction is limited to $5,500 (for 2007 tax returns). This means that anyone who has an IRS tax bill of less than $5,500 will have no benefit from this change. An increased deduction will only benefit those who pay more than that in Federal tax. A taxpayer paying over $5,500 in Federal tax is a single person with over $45,000 in income or a married couple with over $59,400 in income. (These income amounts are a minimum, and presume no deductions, credits, or exemptions for children.)
My first gut reaction to this new law was that it would promote fairness in the tax system. There is an issue that those with less than the above amounts of income get no tax benefit, and those with more income, up to say $100,000 would get a minimal benefit. The true tax savings in this scheme would be to those with very high incomes. They would get the bulk of the benefit. Still, one could say that it is only fair.
There is one problem with this scenerio, however. That is that, while the vast majority of Oregon taxpayers will see little or no benefit from this measure, the State Treasury will find itself with a shortfall of between $1.1 billion and $2.4 billion in each two-year state budget cycle. This would certainly cause a reduction in state services, in a state with an economy that is not at its best right now.
While it would certainly be a noble goal to provide more fairness in the way the Federal tax deduction is handled on Oregon State Income Taxes, this measure does absolutely nothing to address where the state will get the additional funds to make up this shortfall. This measure is irresponsible in that it is not balanced. It proposes a deduction to promote a more fair tax system, but does not balance the deduction with a fair method of changing the system elsewhere. Therefore, while this measure seems to attempt to promote fairness, the numbers do not add up.
If serial measure sponsor Bill Sizemore and those who fund his efforts want to cut taxes and put that on the ballot, that would be fine. They should go ahead and do that in a transparent and straightforward way. The people of Oregon could make an informed decision on that point. This measure does not do that. It cuts taxes for only the top-earning 3% of Oregonians, and does it without regard for how the state will deal with this unbalanced ballot measure.
Measure 59 promises to lower taxes and add fairness to the system, but in its current form, it serves only to give a very small benefit to certain taxpayers, while indirectly taking important benefits away from all Oregon citizens. Please join me in recommending a NO vote on Oregon Ballot Measure 59.
Leave a Reply