Progressive Taxes Win Big In Oregon
The political establishment continues to be obsessed with the victory of Scott Brown in the Massachusetts Senate race. In fact, they are so obsessed they managed to almost completely overlook the success of two important tax initiatives in Oregon the following week.
Oregon voters passed by a margin of 54 to 46 a tax measure that would raise the tax rate on taxpayers with an income of more than $250,000 a year. They also approved a measure that would raise the tax paid by corporations in Oregon. Together the two measures are projected to raise $750 million over the next two years, approximately 5 percent of the state's $14 billon budget.
This victory is striking because it shows that voters in Oregon were willing to support progressive taxation in order to avoid substantial cuts in public services. This is worth noting at time when there is a conventional wisdom taking shape in Washington that the public is increasingly hostile to the government and will oppose taxes in any form.
It is true that Oregon is somewhat more liberal than most states, but it is not far out of line with the rest of the country. Gore won a very narrow victory in Oregon in 2000, as he did in the popular vote nationwide. Kerry took 51.6 percent of the Oregon vote in 2004. This is better than his national total, but not indicative of a state hugely out of line with national sentiment.
It is also important to remember that this was a special election centered on tax issues. The electorate that shows up in off year elections is always skewed to the right and it is likely to be especially skewed when the topic is taxes. For these reasons, if anti-government anti-tax sentiment really has over-run the country, then we should have expected to see these Oregon tax measures going down by substantial margins, not coasting to victory.
So what is going on? First, to give credit where it is due, the groups that were fighting for the initiative did an outstanding job getting their message out. Voters in Oregon understood two things. First they understood that the tax increase would be relatively modest and that it would only apply to a small and affluent segment of the population.
Second, voters recognized that the alternative to the tax increases would be cuts in education and other services that they valued. There was no secret pile of waste, fraud and abuse that could be attacked in order to avoid cuts in social services.
The supporters of the initiatives also did the fieldwork necessary to get voters out to the polls, or actually the mailbox, since Oregon runs it elections with mail-in ballots. There was an especially large turnout from young voters who often stay home in off-year elections.
But this great legwork can only be successful if the electorate actually supports the measures at the polls, as they obviously did. The public was willing to trust that money put into the hands of the Oregon legislature will be mostly well used. Clearly Oregon voters were expressing a very different sentiment than the electorate that sent Scott Brown to the Senate in Massachusetts.
Some of the difference can undoubtedly be explained by the fact that the Massachusetts race featured a charismatic newcomer challenging a seemingly out of touch career politician. However, it is also clear that Massachusetts voters resented a political establishment that left the Wall Street banks more profitable than ever, while tens of millions of people are unemployed and/or facing the loss of their homes. Martha Coakley, the Democratic candidate, was identified with this establishment.
The political establishment likes to tell tales in which people are either for or against government. But, this does not fit most people's view of the world. The vast majority of the public value public schools, streets without potholes, and well-working police and fire departments. However, they hate to see their tax dollars go to make rich people even richer.
As a result of the bailout and the record profits and bonuses now being earned at Goldman Sachs and elsewhere, the Democrats are seen as being on the side of Wall Street. If the Obama administration cannot move beyond symbolic measures and actually change the way things work on Wall Street, then Democrats are likely to continue to pay a big price in future elections.
Another reason it passed: California.
February 8, 2010 2:25 PM | Reply | Permalink
Good for the people of Oregon. I hope what happened there, how it happened, and how it was messaged, is studied by progressives nationwide and put into practice on state and federal levels.
February 8, 2010 2:31 PM | Reply | Permalink
Kudos to Oregon. Not populists - people who hate the rich but who love the system that made them rich, Oregonians hate the rich and hate the system that made them rich. I call them pragmatists.
February 8, 2010 3:03 PM | Reply | Permalink
Expect howls and lamentations of "tyranny of the majority" from all the "poor" suffering millionaires (and their n=many misguided middle-class middle-class toadies) who are more attached to their fortunes than their patriotism.
And when they can't get us to sympathize with them over their terrible suffering at the hands of a vicious majority, they will, as usual, threaten to fire all their employees.
It's their "employer's nuclear option to defeat middle-class welfare" program.
February 8, 2010 3:25 PM | Reply | Permalink
Also it is a more local and personal item in the states. Their children and their police and fire and their parks etc. Not somebody else's. Also the is more a feeling that they have a bit more say about how the money is spent.
But when DC increases taxes it is seen by both the left and the right as a ticket to wasteful spending. The right sees it going to those the can't stand the left sees it going to the military and they both see it going to banks and big business.
So a lot of it has to do with the point of view.
C
February 8, 2010 3:31 PM | Reply | Permalink
"This is worth noting at time when there is a conventional wisdom taking shape in Washington that the public is increasingly hostile to the government and will oppose taxes in any form."
That's because the conventional wisdom is based on the attitudes espoused by the .01% of the population our government represents.
February 8, 2010 4:27 PM | Reply | Permalink
"This is worth noting at time when there is a conventional wisdom taking shape in Washington that the public is increasingly hostile to the government and will oppose taxes in any form."
Seriously: "conventional wisdom" is "taking shape in Washington" that the public will "oppose taxes?"
You are aware that probably the only reason Bush I lost almost twenty years ago was because he broke his "read my lips - No New Taxes pledge?" Or that the only other tax increase in well over twenty years was ostentatiously touted as a tax increase "only on those making $250,000 a year or more?"
Americans have been voting according to the belief that paying taxes is no different from getting a root canal on a healthy tooth without anesthesia since at least Ronald Reagan.
And this is another howler:
"The vast majority of the public value public schools, streets without potholes, and well-working police and fire departments. However, they hate to see their tax dollars go to make rich people even richer."
Wrong, wrong and wrong. They may value those things, but they continue to vote for politicians who promise to never raise their taxes, so they value them until they might actually have to pony up a couple of hundred of extra buck a year, then it's potholes and schoold be damned.
Sometimes I wonder what country you academics actually live in, because it seems to have about as much to do with the one I occupy as it does with Jupiter.
February 8, 2010 5:28 PM | Reply | Permalink
But that kinda flies in the face of what the very enlightened people of Oregon just did Brew. The American people, well at least the people of Oregon for sure, are much more savvy and nuanced then some give them credit for...they had it figured out that raising taxes on the right people is a good thing.
February 8, 2010 11:49 PM | Reply | Permalink
"But that kinda flies in the face of what the very enlightened people of Oregon just did Brew."
For the first time in a long, long time. I hope it's the start of a trend. It shouldn't be abhorrent to the citizens of this country to contribute to services that make everybody's lives a little better.
February 8, 2010 11:59 PM | Reply | Permalink
Yeah, a trend. That would be nice to see...replicated across this great republic.
8-)
February 9, 2010 12:03 AM | Reply | Permalink
. . . the very enlightened people of Oregon . . . .
Oxymoron? Or merely witty irony?
As I interpret your comment, you're agreeing with brewmn61. The only tax increase people will vote for is a tax increase on other people.
Did I misread you?
February 9, 2010 9:16 AM | Reply | Permalink
What I was alluding to is having the will to raise taxes, even when it might mean you have to pay more at some point...and I am sure a non-insignificant portion of Oregon's electorate probably makes over $250K. But I think that the voters of Oregon decided to ignore what I am sure was the Chamber of Commerce's scare tactics about how this would mean massive job losses in their state. I will go on record saying I don't believe taxes should be raised on the middle class right now anywhere. I think too much of the tax burden falls disproportionately on the middle and lower classes with the myriad of consumption taxes on the books. So either other revenue streams need to be found or essential government services and programs will have to be severely cut...and the voters of Oregon looked to where the money is to be found right now.
February 9, 2010 1:05 PM | Reply | Permalink
The Chicago Art Institute as then greatest entry sign I've ever seen. "You must pay something," it says. Everyone who enters must pay something. They want the service, they must pay something. If you can't afford the suggested donation, that's okay. As long as you pay something.
Statistically, about 3 percent of the national population makes more than $200,000 for a two-income household. So my guess is that percentage of Oregonian voters who actually have to pay this tax increase is small. The majority of voters decided to those other than themselves, while taking on no additional burden.
If you think higher taxers are necessary -- and if you do, I don't disagree -- then call for them to be raised on everyone. Make it progressive, but if there's a public need, then everyone should pay for it -- everyone should make some sacrifice. If you are voting for someone to sacrifice, then you ought to be willing to sacrifice, too. If you're not doing that, then you're just demanding of someone what you are not willing to demand of yourself.
And for the record, the top 5 percent of taxpayers pay nearly 50 percent of all taxes. That's the way the system has to work, but to say the middle class pays a disproportionate share of taxes is disingenuous.
February 10, 2010 1:04 AM | Reply | Permalink
"And for the record, the top 5 percent of taxpayers pay nearly 50 percent of all taxes."
Cry me a river.
True, but the real way to look at this is: How much is left over for personal use after those taxes are paid?
Those top 5% currently have upwards of $150,000 to spend on themselves after taxes while the top 1% each have well over $1,000,000 left to spend on themselves.
A person earning $30,000 per year in a 20% tax bracket has $24,000 left to spend on herself - much of which will go toward sales tax, gas tax, etc.
.
February 11, 2010 5:42 PM | Reply | Permalink
The rich better wake up, the times they are a changin
I remember the movie the Naked Prey
Had the greedy hunters shared their spoils, they would have lived
http://www.youtube.com/watch?v=_bQc_rZumOw
February 8, 2010 6:31 PM | Reply | Permalink
Thanks for your patience and sorry for the inconvenience!
Best regards, Mary, CEO of youtube video downloader
December 16, 2010 10:49 AM | Reply | Permalink
Dr Baker, thank you for noticing a very important vote here in Oregon.
As a proud Oregonian, I can tell you a few extra details about these measures:
- The legislature is run by Democrats. They passed this tax increase. Opponents put it on the ballot for a vote, as is allowed by state law.
- State Dems made budget cuts to reduce the deficit by half. These taxes cover the other half to maintain essential services -- and jobs -- in a state with 11% unemployment.
- Tax increase ballot measures almost always fail in this state.
- Local Dems took nothing for granted. People were wigged out about low turnout here in Portland. I myself did extra lit drops. We met several canvassers covering eastside neighborhoods the final weekend.
In the context of HCR collapse, I looked at it this way: State Dems stuck their necks out making the hard choices nat'l Dems cannot figure out. We needed to support them because the alternative would be disaster. Thankfully, many others felt the same way.
February 8, 2010 8:16 PM | Reply | Permalink
I'm not sure that raising taxes on the wealthy or on businesses is going to raise the desired revenue in the long run. Oregon is dealing with 11% unemployment. I joined the Navy in the 1980's when unemployment was at about that level then. The economics were pretty simple. A variety of pressures came together to break the back of the timber/lumber industry. Everything else collapsed, because it was all connected. the state had issues with revenue then too. I don't remember if we raised taxes as the solution. I do remember this, the factory I was working at in Tualatin was only barely keeping its head above water. I don't think they could have handled additional taxes. If that factory went under, we would all lose our jobs and the state would lose the revenue from the company and from the workers. Additionally, the state would be further burdened by more unemployed workers.
Ultimately, I think the answer is growing the economy larger, so that resulting revenues increase. It is easier to get people to agree to raise someone elses taxes, but it's seems like a short-sighted solution, particularly if it further strains private industry (which is really what state revenue depends on).
I retire from the service in a few years. I kind of hoped to return home some day, but I don't know if it makes sense. 11% unemployment is pretty high. The White House is predicting nationally unemployment in 2012 at a little over 8%. Oregon seems to run hiigher than the rest of the nation. Taxing the companies and investors that help create the jobs doesn't sound wise.
February 14, 2010 12:11 PM | Reply | Permalink
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