The tax debate begins: House leaders square off
Speaker Dave Hunt and Republican leader Bruce Hanna discuss ballot initiatives in Oregon City
The House Democratic and Republican leaders fired some of the first verbal volleys in what will likely become a fierce, statewide political battle over two tax initiatives in the January election.
House Speaker Dave Hunt (D-Gladstone) and Republican Minority Leader Bruce Hanna (R-Roseburg) debated Measures 66 and 67 during a North Clackamas Chamber of Commerce-sponsored breakfast at Oregon City’s Rivershore Bar & Grill last week.
The measures are ballot initiatives that attempt to repeal tax increases on corporations and wealthy Oregonians that were passed during the 2009 legislative session. Measure 66 increases the personal income tax on Oregonians who make more than $125,000 or households that make more than $250,000. Measure 67 increases the corporate minimum tax. The measures are on a Jan. 26 special ballot; a yes vote upholds the increases.
The discussion likely lends insight into how the yes and no campaigns will frame their arguments over the initiatives.
Hunt drove home the point that the vast majority of Oregonians will see no change in their taxes, and most Oregon business will see only the marginal increase in an 80 year old tax rate. The personal income tax, he pointed out, affects only the highest Oregon wage earners, and only increases taxes on any of their income over $250,000 if they file jointly. The increase is also cut in half by 2012.
“Ninety-seven percent of Oregon households will pay zero (in increases),” he said.
Hunt stressed that most businesses will only face an annual increase in the corporate minimum tax, which has remained at $10 since 1931. It would rise to $150.
“Show me a business where that kills a job,” Hunt said.
Larger corporations with more than $500,000 in revenues will pay one-tenth of 1 percent of total revenues. Hunt said that merely moves Oregon from having the “third to fifth lowest” corporate taxes, and keeps rates lower than the four states that border Oregon.
Hanna, on the other hand, categorized the increases as “job-killing taxes” that will lead to further job loss and decreased investment in the state. Hanna also said there is enough money in state coffers to cover critical expenses without raising taxes.
“What we need to do is get tough,” Hanna said. “We tighten our belt and we act like Oregonians. We act like businesses.”
Hanna said Republicans introduced a “Back to Basics” proposal during the legislative session that would have increased the state contribution to education without increasing taxes by “prioritizing spending.”
He also cautioned that the tax increases would affect everyone, even if they are only levied on a small number of businesses and individuals.
“Costs will increase. Oregonians will pay more for gasoline, they will pay more for groceries,” he said. "These tax increases hit every person who lives or works in Oregon.”
He also cautioned that an increase in income taxes could spur wealthy Oregonians to move elsewhere to avoid higher taxes.
Not surprisingly, the two men had vastly different ideas of what would happen if the measures failed.
Hunt said it would gut public services. “If the measures fail, there will be hundreds of millions in cuts to what we have already made,” he said.
Hanna said that if the measures fail, “business has a fighting chance.”