Tag Archives: oregon

by - 0 comments

Is Brad Avakian running for Secretary of State or Director or Public Health?

doctor-image__opt

One of Brad Avakian’s more ubiquitous TV ads emphasizes how he will “ensure a woman can make personal medical decisions about her pregnancy.”

And Planned Parenthood says reproductive health care in Oregon depends on voting for Brad Avakian. “Your reproductive health care is on the Oregon ballot,” says an article by Mary Nolan, executive director for Planned Parenthood PAC of Oregon, on Blue Oregon, a progressive online news and commentary site. Nolan quotes Avakian saying, “As a civil rights attorney, legislator and now Labor Commissioner, I know access to safe and affordable abortion service is a fundamental civil right.”

Planned Parenthood PAC has also made a $7500 contribution to Avakian’s campaign. If I were a contributor to Planned Parenthood, I’d ask for my money back.

 After all, where is protecting reproductive health care listed among the duties of Oregon’s Secretary of State?

Numerous studies have shown that large numbers of voters don’t know which officials are responsible for which issues, a circumstance that makes it hard to hold them accountable for their performance.

All that cluelessness could work to Avakian’s advantage.  In a classic example of misdirection, instead of emphasizing his fit for the Secretary of State job, he’s running as a champion of liberal causes.

Don’t fall for it.

by - 0 comments

Measure 97 is just a Trojan horse for bigger government

biggovernment

The cat’s out of the bag.

Now we know what the Democrats and their union allies want with Measure 97.

It’s not the measure as written, with its deceptive promises of more money for education, healthcare and senior services. It’s $6 billion more out of taxpayer’s pockets each biennium that the Democrats can use to grow government, cover their disastrous PERS decisions over the years, reward their friends and punish their enemies.

Rep. Mitch Greenlick (D-Portland), when endorsing the measure in late 2015, said it would eliminate much of the constant need to choose between funding critical budget concerns each legislative session. “If that passes, we’ll have a lot of money to pay for stuff,” Greenlick said.

Stuff, indeed.

Oregonians who support Measure 97 because they believe Democrats’ claims that the revenue would be committed to education, healthcare and senior services are going to be mighty disillusioned if the Measure passes because, the fact is, the Legislature will be able to do just about anything it pleases with the resulting revenue.

On Aug. 1, 2016, the nonpartisan Office of the Legislative Counsel confirmed this when it released an opinion. “Section 3 would not bind a future legislature in its spending decisions,” wrote Chief Legislative Counsel Dexter Johnson in the opinion. “If Measure 97 becomes law, the Legislative Assembly may appropriate revenues generated by the measure in any way it chooses.”

It turns out that the Democrat-controlled Legislature could even change how the revenue is raised. Some people probably support Measure 97 now because they want to “put it to big business.” But there’s nothing to stop the Democrat-controlled Legislature from changing the entire tax formula, so long as it doesn’t result in more tax revenue, according to the Oct. 18 Portland Tribune. Only a simple majority of the Legislature would be required to approve changes in the formula, or anything else.

Sen. Mark Haas, D-Beaverton, Chairman of the Senate Finance and Revenue Committee, told the Tribune the Legislature can expect “a cavalcade of 10,000 lobbyists from every industry with valid stories about why their rates should be lower.”

And every one of those lobbyists will be expected to back up their pleas with campaign contributions, further exacerbating the already excessive role of money in Oregon politics.

A senior Democratic Legislator once defended Measure 97 as the best solution because there was no other option. Clearly, even the Democrats now believe that’s not the case.

by - 0 comments

Oregon’s Republican Party is committing suicide

seppuku_by_mark_san

It’s hard to watch a party self-destruct.

If you look at all the races on the Oregon ballot on Nov. 8, it’s clear that the Republican Party has largely abdicated its position as the loyal opposition.

It starts at the top with the U.S. Senate race. Anybody know who the Republican candidate is? His name is Mark Callahan. I can tell you he went to OSU. But his website doesn’t list any events he’s attending and OpenSecrets.org reports he has raised just $15,852 (compared with Democrat Ron Wyden’s fundraising total of $11.4 million).

The 3rd and 5th District races for the House of Representatives aren’t any better.

In the 3rd, which includes most of Multnomah County, including Portland east of he Willamette, 10-term Democrat Earl Blumenauer is opposed only by Progressive Party candidate, David Delk, who says he has no experience. OpenSecrets.org reports he has raised nothing (compared with Blumenauer’s fundraising total of $1.1 million). Of course, the 3rd has been held by a Democrat since January 1937.

In the 5th, the Republicans did manage to recruit Colm Willis to run against Democrat Kurt Schrader. Willis has deep Oregon roots, graduated from Willamette University’s School of Law and worked as a staff member on a U.S. Senate committee, but he has raised just $239,113 (compared with Schrader’s $1.6 million)

How about the governor’s race?

budpierce

Bud Pierce

Bud Pierce may be a great doctor and a nice guy, but he was invisible statewide, a cipher, until this election. He’s managed to raise $2.5 million, but Brown has raised $3.5 million and Oregon hasn’t elected a Republican governor since 1982.

An OPB poll released on Oct. 17 showed that Brown leads Pierce by an astonishing 46 percent to 33 percent. This despite the fact that even Willamette Week offered faint praise for Kate Brown, declaring, “Brown’s greatest political strength is her affability—and her ability, so far, to blame problems on her predecessor.”

Work your way down the Oregon ballot and it gets worse, with many Democrats facing NO republican opponent.

The Republican Legislative Campaign Committee (RLCC), a state-oriented national organization that seeks to elect Republicans to state legislatures, identified the Oregon State Senate and House of Representatives as targets in the 2016 elections. You’d never know it.

In the Oregon State Senate races, there’s no Republican candidate in the 14th, 18th, 21st, 22nd and 23rd Districts.

In House races, there’s no Republican candidate in the 9th, 27th, 34th, 35th, 36th, 42nd, 43rd, 44th, 45th, 46th, 47th and 49th Districts.

How in hell the Republicans ever hope to recover power in Oregon under these circumstances is beyond me. And that’s not healthy for Oregon. One party dominance leads to corruption, cronyism, recklessness and abuse of power.

The thing is, if the Republicans would focus on building a strong bench, skillfully build public awareness of those with the greatest potential, encourage them to run for office and back them up with ample financial support, they can win and change the dynamic of state politics.

Look at the 2010 race between Democrat John Kitzhaber and Republican Chris Dudley. Despite some clear errors in strategy and execution, Dudley captured 694,287 votes, only 22,238 fewer than Kitzhaber’s 716,525. Damn close. More promising for the Republicans, Dudley carried all but 7 of Oregon’s 36 counties.

2010governorrace

Blue counties: won by Kitzhaber;                 Red counties: won by Dudley

Lane and Multnomah Counties, two Kitzhaber won, may be a lost cause for Republicans, but if Dudley had been able to peel off more votes in the other 5 he might well have won.

In other words, offer appealing, moderate candidates, back them up with financial resources, run strong campaigns across Oregon and Republicans can win.

by - 0 comments

“Yes on 97” campaign relying on socialist endorser

The Yes on 97 campaign is featuring Martin Hart-Landsberg, Professor Emeritus of Economics at Lewis & Clark College, in its advertisements, assuming that an economist will be a persuasive voice of authority to the general public.

martin

Martin Hart-Landsberg

Economists support Measure 97

But what does the public know about Hart-Landsberg? Here’s some background on his views.

     About Martin Hart-Landsberg

“…seriously if I hear (in his class) how capitalism is bad, socialism is good one more time I might vomit.”

“(Class) mainly focuses on how capitalism is bad and socialism is good. You don’t learn very much else.”

Rate my Professors at Lewis & Clark College

___________________________________________

“…it is capitalism (as a dynamic and exploitative system), rather than neoliberalism (as a set of policies), that must be challenged and overcome.”

“…therefore, as participants in the resistance, …we can illuminate the common capitalist roots of the problems we face and the importance of building movements committed to radical social transformation and (international) solidarity.”

Neoliberalism: Myths and Reality by Martin Hart-Landsberg

___________________________________________

“…capitalist globalization is largely responsible for creating or intensifying many of our most serious economic and social problems.”

“…even a “robust” capitalism is now an obstacle to human progress.”

From the Claw to the Lion: A Critical Look at Capitalist Globalization, by Martin Hart-        Landsberg

_______________________________________

“The major obstacle to development is capitalism itself, and our efforts must be directed towards advancing new visions of democratic and sustainable development.”

Challenging Neoliberal Myths: A Critical Look at the Mexican Experience by Martin Hart-Landsberg

________________________________________

“If we want socialism for the twenty-first century, we need to understand why the ‘real’ socialisms of the last century so often ended in capitalism.”

Praise for “The contradictions of ‘real socialism’ by Martin Hart-Landsberg

_________________________________________

“For Hart-Landsberg and Burkett, a socialist program in China or elsewhere—which they identify with the confusionist formula of a “worker-community-centered economy”—must have little or no commerce with the corrupting evils of the world capitalist market.”

“Despite their professed Marxism, Hart-Landsberg and Burkett’s outlook amounts to a form of anarcho-populism.”

China’s “Market Reforms”: A Trotskyist Analysis, Workers Vanguard

___________________________________________

“…far from undermining the relevance of Marxism, the Chinese experience highlights its critical importance as a framework for understanding and overcoming the dynamics of contemporary capitalism.”

Thinking About China: Capitalism, Socialism and Class Struggle, By Paul Burkett and Martin Hart-Landsberg, Socialist Viewpoint

 

Enough said?

by - 0 comments

With Oregon school finances tight, Democrats and unions push to raise costs

Oregon Democrats talk out of both sides of their mouth when addressing school finances.

While arguing that our schools desperately need more money and advocating for Measure 97, which would impose huge business tax increases to cover the bill, they’ve been working to increase school costs.

It all has to do with unemployment insurance.

unemploymentapplication_media-week_flickr1

School districts, not their employees, pay for unemployment insurance benefits. Under ordinary circumstances, school employees released for summer break, customary vacation periods or holiday recesses aren’t considered unemployed and aren’t eligible for unemployment compensation benefits.

But leave it to the Democrats, allied with their union supporters, to try to chip away at these restrictions and pass along the added costs to Oregon schools.

Democrats made a run at changing the law in 2015 when State Senator Michael Dembrow (D-District 23), who receives substantial campaign contributions from unions, introduced SB 470.

michaeldembrow

Oregon State Senator Michael Dembrow

At the time, school employees who performed services other than instruction, research or administration did not qualify for unemployment insurance benefits during school breaks. A committee amendment which replaced the original language of SB 470 would have changed that, permitting school employees who left their jobs for good cause to receive unemployment insurance benefits.

The bill was still in committee upon adjournment, so it died.

But the Democrats persisted.

Earlier this year, Senator Dembrow introduced SB 1534, which again proposed permitting school employees who leave their jobs for good cause to receive unemployment insurance benefits during summer and school breaks.

Tricia Smith of the Oregon School Employees Association testified before the Senate Committee on Workforce and General Government that school employees who could be eligible for benefits under the bill are in non-instructional positions such as secretaries, food service workers, custodians, school bus drivers and others.

schoolbusportland

Like the proverbial camel’s nose under the tent, the law was likely the first salvo in a long-range union attempt to make teachers eligible for unemployment compensation during summer and school breaks, too.

I was curious how much this expanded unemployment compensation allowance had cost school districts so far. So I asked the Oregon Employment Department to tell me how many people had collected unemployment insurance benefits under the new standards, their job categories and the amount of unemployment insurance benefits paid out to them.

Fortunately, I learned that the Democrat’s misguided attempt to burden Oregon schools with higher unemployment compensation costs has been crushed.

After passage of the legislation, the Employment Department received notice from the U. S. Department of Labor that SB 1534 does not conform with federal guidelines to administer the Unemployment Insurance program.

According to Craig Spivey, a Public Information Officer with the Oregon Employment Department, “SB 1534 included a provision that if the changes to Oregon statute fail to conform to federal guidelines, they would not go into effect. Therefore SB 1534 is not in effect at this time and no unemployment claims have been filed” under the more expansive criteria in the legislation.”

Whew! Oregon school districts dodged a bullet on this one.

 

by - 0 comments

Rent control: Kotek’s folly

On Sept. 12, Oregon House Speaker Tina Kotek (D-Portland) said she planned to push for an end to Oregon’s ban on rent-control laws, enabling local governments to move ahead with measures of their own.

Kotek said she also wants to ban all rent increases above a “reasonable” percentage and end to no-cause evictions.

tinakotek

Oregon House Speaker Tina Kotek

The problem is, no matter how much liberals embrace the concept, rent control doesn’t work. Any short-term benefits, including the applause of some constituents, are always overshadowed by the long-term problems rent control creates.

  • However you phrase it, under rent control, government dictates what private owners are allowed to charge for their private property. Yes, the free market has flaws, but it is far better than having bureaucrats running things.
  • Landlords who can’t raise the rent on their property to a market price are more likely to cut back on maintenance and less likely to invest in improvements. Not only will landlords have absolutely no economic incentive to invest more in their properties, they may not even have the funds because of limits on their rental income.
  • Rent control distorts the housing market by misallocating rental units to those who are already renting them. Whenever government prevents the charging of prices high enough to clear the market, shortages will occur.
  • The imposition of rent control can lead to a “demolition derby” where older controlled rental units are purposely torn down and replaced with higher priced units.
  • Rent control does not guarantee low rents because it doesn’t regulate the starting rent for a new tenant. When a tenant in a rent-controlled unit moves out, any savvy  landlord will set the rent in the new lease at the current market rent, which is likely to be much higher.
  • In a review of 140 economics studies on rent control in Economics Journal Watch, economists overwhelmingly agreed that, “A ceiling on rents reduces the quantity and quality of housing available.” From the abstract: “I find that the preponderance of the literature points toward the conclusion that rent control introduces inefficiencies in housing markets. Moreover, the literature on the whole does not sustain any plausible redemption in terms of redistribution.”
  • A broad survey of economists by the IGM (Initiative on Global Markets) Forum revealed a similar repudiation of rent control. The Forum is a program of the University of Chicago’s Booth School of Business. “Rent control discourages supply of rental units,” said Associate Head of the MIT Department of Economics, David Autor. “Incumbent renters benefit from capped prices. New renters face reduced rental options.”
  • Once rent control is imposed, it is extremely hard to get rid of, even where its futility is eventually recognized. That’s because rent control will have held rents far below the market rate, so removing them is likely to cause immediate and substantial rent increases, something few politicians (and even some rent control critics) will be willing to embrace in the face of a potential public outcry.

As Art Carden put it in The Unintended Consequences of Rent Control, “Suppose that you want to destroy a city. Should you bomb it, or would it be sufficient just to impose rent control?”

by - 0 comments

City Club of Portland: wrong on Measure 97

tax-increaseAppalling! What else can you say?

Members of the City Club of Portland voted Tuesday to support Measure 97, which proposes imposing burdensome gross receipts taxes on Oregon businesses that could total $6.1 billion in the 2017-19 biennium.

It’s hard to believe that such a distinguished civic group could support such a flawed scheme.

Oregon’s General Fund expenses are expected to grow by about 14 percent, or $2.7 billion, in the 2017-2019 biennium. The budget anticipates only about half that will be covered by new revenue, translating to a projected $1.35 billion shortfall.

Given such things as public employee pay increases, higher Medicaid expenses, and pension rate increases for state government and school district employees covered by PERS, some additional revenue may be justified. But not $6.1 billion. That’s highway robbery.

And collecting the additional revenue through an odious gross receipts tax, which ignores a business’s profitability, or lack thereof, is irresponsible. How well-educated City Club members, many of whom presumably work in the private sector, could endorse such a tax is inexplicable.

Also damning is the uneven applicability of Measure 97’s proposed taxes. Taxation of just C Corporations would create a vastly uneven playing field for Oregon businesses.

As the minority noted in the City Club’s committee report, “Many large businesses are LLCs and S corps, and they often compete with C corps in similar sectors. For example, Fred Meyer (Kroger) and Safeway grocery store chains are C corps and would pay the tax. New Seasons Market, a B corporation,47 and Albertson’s, a limited liability corporation (LLC),48 would not pay it. “

The flaws in the City Club’s arguments in favor of Measure 97 are evident right off the bat.

The City Club committee charged with determining the merit of Measure 97 said it “…presents a long-awaited opportunity to assure adequate investment in the health, education and the well-being of Oregonians.”

Nonsense!

The fact is there is absolutely no guarantee the legislature will apply Measure 97 revenue to early childhood through grade 12 public education, healthcare and services for senior citizens, in the coming years as the measure states.

If Measure 97 is approved by voters, the Legislature can appropriate its revenues “in any way it chooses,” Legislative Counsel Dexter Johnson said in an Aug. 1 letter to Rep. John Davis, R-Wilsonville, a member of the House Committee on Revenue. Not only are Legislators “not bound by the spending requirements” of Measure 97, they can “simply ignore” them,” Johnson added.

What is most likely is that over time Measure 97 revenue would be spread around like honey in response to pressure from self-serving special interests with access to, and influence on, decision-makers.

Rep. Mitch Greenlick (D-Portland) said when endorsing the measure, “If that passes, we’ll have a lot of money to pay for stuff.” The hundreds of groups that spend millions annually lobbying the legislature will have plenty of ideas on what “stuff” to spend the money on.

There’s also a high likelihood that some of those lobbyists will seek exemptions from all or part of the tax, just as Nike cut a deal with former Gov. John Kitzhaber and the legislature in 2012 to protect it from changes in the way the state calculates the company’s state income taxes.

Gov. Brown has already said she’d favor some “technical adjustments” if Measure 97 passes, including:

  • Allowing businesses to subtract a portion of their Oregon payroll from their corporate tax bill.
  • Prohibiting businesses from changing their corporate status “for the primary purpose” of evading the new gross receipts tax. (As written, the measure would exempt “benefit corporations” from the new tax)
  • Helping out software companies in Oregon by classifying sales of their services based on the location of the purchaser, rather than the location of the company selling the service.

The majority of the City Club committee that recommended a “yes” vote on Measure 97 also argued that “… the potential benefit of adequately funded state services outweighed any of the tax’s potential detrimental effects and that the consequences of prolonging the state’s revenue shortage where (sic) too great.”

Outweighed “any of the potential detrimental effects”? In other words, satisfying the state’s greed with $6.1 billion in additional revenue per biennium is more important that an expected dampening of income, job and population growth. Give me a break.

Finally, in endorsing Measure 97, the City Club is giving an easy out to liberal Democrats who want to avoid tackling difficult spending issues.

For example, as the minority pointed out, the unfunded PERS liability is $21-$22 billion. If nothing is done to deal with the creeping cost of PERS, even the Measure 97 windfall won’t be enough to avoid a funding crisis.

It’s not as though Oregon’s budget problems snuck up on the Democrat-controlled Legislature, leaving it no choice but to abdicate its responsibilities and leave it to a poorly crafted union-inspired ballot measure to fix things.

It’s been abundantly clear for a long time that trouble was coming. Where was the grit to fix things right?

 

by - 0 comments

Black student demands to erase history at the University of Oregon: just say no.

DeadyHall

The University of Oregon’s first building opened on Oct. 16, 1876. It was named Deady Hall for Judge Matthew Deady in 1893.

On November 17, 2015, the University of Oregon’s Black Student Task Force sent a list of twelve demands to four top university administrators.

The group asserted that “the historical structural violence and direct incidents of cultural insensitivity and racism” on campus create an environment that prevents black students from succeeding.

In order to create “a healthy and positive campus climate” for black students, the Black Student Task Force said:

“We…DEMAND that you work with us and implement the following list of programs:

  • Change the names of all of the KKK related buildings on campus. DEADY Hall will be the first building to be renamed.
  • We cannot and should not be subjugated to walk in any buildings that have been named after people that have vehemently worked against the Black plight, and plight of everyone working to achieve an equitable society.
  • Allowing buildings to be named after members who support these views is in direct conflict with the university’s goal to keep black students safe on campus.
  • We demand this change be implemented by Fall 2016”

University President Michael Schill appointed a committee of administrators, faculty, and students to develop criteria for evaluating whether to strip the names off Deady Hall and Dunn Hall, part of Hamilton residence hall, because of their association with racist actions in Oregon in the nineteenth and early twentieth centuries.

Once the criteria were established, Schill assembled a panel of three historians to research the history of Matthew P. Deady and Frederick S. Dunn to guide his decision-making.

The historians recently released an exhaustive, extensively footnoted 34-page report.

The report described the complex lives of both men, lives filled with negatives, positives, ambiguity and contradictions.

Deady, though a territorial legislator, constitutional convention delegate and presiding officer, and U.S. District Judge for thirty-four years, supported slavery.

Dunn, though he graduated from the University of Oregon, spent the vast majority of his career there and enjoyed a national reputation as a classics scholar, was also a prominent member of the Ku Klux Klan and led the Eugene chapter.

Based on the historians’ report, there is no question that both men held views and engaged in activities that would be considered loathsome today.

But that does that mean their names should be summarily erased from history at the University of Oregon.

To surrender to the Black Students Task Force’s demands would be to embrace presentism in all its intellectual weakness, to endorse interpreting historical events without any reference to the context or complexity of the time.

If there’s one thing students should learn in college, it’s that It makes no sense to see the world entirely in the present tense.

In looking at history, it is critical to acknowledge the degree to which our position and experiences color how we look at bygone days, places and people.

Presentism “…encourages a kind of moral complacency and self-congratulation,” said Lynn Hunt, president of the American Historical Association. “Interpreting the past in terms of present concerns usually leads us to find ourselves morally superior…,”

Many of our forbears espoused racial views that are today considered abhorrent, including people we still consider exemplars of the American experience.

In addition, somebody’s historical goodness and worth should not be based on just one criteria.

“…making race the only basis of judgment…does violence to the spirit of historical investigation, because it reduces complex individuals to game show contestants who must simply pass or fail a single test,” says David Greenberg, a professor of history and journalism and media studies at Rutgers University.

In April 2016, Schill and Vice President for Equity and Inclusion Yvette Alex-Assensoh published a letter to the campus community saying, “…we recognize that we can and must do more as an institution to meet the needs of Black students”, but made no commitments on the building renaming issue.

When Schill does make a decision, I earnestly hope he will just say no.

 

 

 

 

 

 

 

 

 

 

 

by - 0 comments

Lies, damn lies and statistics: SEIU’s campaign for Measure 97

lyingcartoon

“Those who lie, twist life so that it looks tasty to the lazy, brilliant to the ignorant, and powerful to the weak,” said José N. Harris, an American author.

Based on pro-Measure 97 arguments being put out there by the Service Employees International Union (SEIU), the union knows all about twisting life.

A flyer just mailed to Oregon households by SEIU says 0.25% of Oregon’s 400,000 businesses would pay more under measure 97. Not so fast.

An analysis by the Oregon Legislative Revenue Office on the potential impacts of Measure 97 (when it was still referred to as Initiative Petition 28) made clear that the actual number of businesses that will pay the new taxes is unknown and trying to pin down an exact number is “particularly risky”. That’s because it’s not known how many businesses will take steps to reduce or eliminate the increased tax triggered by the measure.

Potential tax avoidance strategies, according to the Legislative Revenue Office, include:

o Shifting from a C-Corporation to an S-Corporation or non-corporation status.

o Spinning off subsidiaries into separate businesses to reduce Oregon sales below $25 million on the combined state corporate tax return.

o Using mergers and acquisitions or other methods to adjust where the plurality of services are performed under the cost of performance apportionment methodology.

o Vertically integrating with intermediate suppliers in order to reduce taxable transactions.

o Converting to a benefit company, which would not be subject to the new tax.

The risk of setting a firm number for tax revenue under Measure 97 is heightened further by the fact the direct effect of the measure would be “…so heavily concentrated on a relatively few large corporations, thereby giving them a powerful incentive to develop tax planning strategies,” the Revenue Office concluded.

To the extent businesses do take steps to minimize or avoid the new tax, the predicted revenue may not flow into the state’s coffers, forcing more tough choices.

The SEIU is also guilty of peddling dishonest information when it says in its flyer” “Fact: funding can only be spent to improve education, health care and senior services.” SEIU knows full well that Measure 97 would not limit how the resulting tax revenue could be spent by the legislature.

Measure 97’s spending requirements are meaningless Legislative Counsel Dexter Johnson said in an Aug. 1 letter to Rep. John Davis, R-Wilsonville, a member of the House Committee on Revenue.

If Measure 97 is approved by voters, the Legislature can appropriate its revenues “in any way it chooses,” Johnson said. Not only are Legislators “not bound by the spending requirements” of Measure 97, they can “simply ignore” them,” Johnson added.

And even if Gov. Kate Brown has said, “…I will make sure the funds the measure yields go ­toward schools, health care and seniors, as the voters expect,” she is not bound to that commitment, nor are future governors or legislators.

In its purposeful deceit, the SEIU is revealing its true opinion of Oregonians. As John-Paul Sartre said, “the worst part about being lied to is knowing you weren’t worth the truth.”

 

by - 0 comments

Measure 97: don’t buy a pig in a poke

piginapoke

After months of waffling and so-called reflection, Oregon Gov. Kate Brown now says she supports a whopping increase in business taxes through Ballot Measure 97. Surprise!

What liberal Democrat wouldn’t salivate over the prospect of $6.1 billion of additional state revenue in the 2017-19 biennium?

What’s dismaying is that Brown seems to be on the voters’ side, according to a recent poll by Clout Research. That poll, released on July 27, concluded the following with respect to Measure 97:

  • Yes              39%
  • No               34%
  • Not Sure    27.1%

The only saving grace here is that, according to FiveThirtyEight, Clout Research isn’t too reliable, earning a lousy C- ranking. Of the 9 Clout polls FiveThirtyEight reviewed, Clout called only 3 correctly. This compares, for example, with the ABC News/Washington Post which polled 78 percent of 51 races reviewed correctly and earned an A+ rating.

 Opponents of Measure 97 can also take some solace in the fact that The Clout poll  found support for the measure is diminishing. About 39 percent of respondents to the Clout poll favored the measure, versus 44 percent who favored it in early May.

Still, Brown’s support for Measure 97 is hard to fathom given the real impacts and uncertainties associated with the measure.

For example, Democrats always like to position themselves as dedicated, empathetic protectors of the poor. But Measure 97, if approved, would be a significant burden on the poor.

“…the gross receipts tax is subject to the same equity concerns as the retail sales tax because under most circumstances it eventually leads to higher consumer prices,” said Oregon’s nonpartisan Legislative Revenue Office in a report. “Any tax that is based on general consumption will have a regressive impact on the distribution of the tax burden, meaning that lower income households will experience a higher tax burden as a percentage of their income than higher income households.”

According to the report, families earning up to $48,000 a year will see a 9 percent decrease in net household after-tax Income under Measure 97 after wages and prices have adjusted to the new tax policy. In contrast, families earning over $206,000 a year will see just a 4 percent decrease in net household after-tax Income.

In the same vein, Measure 97 would change the distribution of Oregon’s state and local tax burden to disadvantage low-income Oregonians. According to the report, families earning up to $48,000 a year would see their effective tax rate go up in the range of .51 percent-.80 percent. In contrast, the effective tax rate of families earning more than $206,000 would go up just .27 percent.

So much for the Democrat’s commitment to low-income families.

For a party that says so often that it wants fairness and equality in the economy, its support for Measure 97 is also inconsistent. That’s because Measure 97 could really cause the equality of Oregon’s corporate tax system to go seriously awry.

According to the Legislative Revenue Office report, gross receipts taxes, such as those proposed in Measure 97, can distort tax payments because of something called pyramiding. “Pyramiding occurs when the gross receipts tax is built in at the time each transaction occurs and then passed on to the next stage,” the report said. “Because industries vary greatly in the number of transactions that occur, the effective tax rates can be considerably higher for those industries with multiple transactions compared to those that have very few.”

A study by the Washington Legislature, cited in the Legislative Revenue Office report, backed up this conclusion. “Because the degree of pyramiding varies widely, this means that effective tax rates will vary widely among industries, thereby distorting market prices and decisions,” the report said.

With all their talk of fighting inequality, is that really what Democrats want, a flawed, unequal business tax system?

Democrats will also be relying on some very iffy revenue expectations if Measure 97 passes and they grow spending based on the Legislative Revenue Office’s revenue projections. The office’s report projects that the largest 274 corporations based on Oregon sales would see their annual Oregon taxes increase by over $2 billion, or most of the total tax revenue increase from Measure 97.

But the office emphasizes that this is a very dubious number. “Since these corporations are large, operate globally in many cases, and often have substantial market power; accurately predicting their behavioral response to a large tax increase presents numerous challenges. The individual behavioral response of these corporations will be a key factor in determining how the tax burden is ultimately distributed.”

Finally, Oregonians who support Measure 97 because they believe Democrats’ claims that the revenue would be committed to things like K-12 education and healthcare are tragically misinformed. On Aug. 1, 2016, the nonpartisan Office of the Legislative Counsel released an opinion saying, in essence, the Legislature can do anything it damn pleases with Measure 97 revenue.

“Section 3 would not bind a future legislature in its spending decisions,” wrote Chief Legislative Counsel Dexter Johnson in the opinion. “If Measure 97 becomes law, the Legislative Assembly may appropriate revenues generated by the measure in any way it chooses.”

In other words, don’t bet your sweet bippy on how this would all play out.

With all these negatives and uncertainties, do Oregonians really want to buy the Democrat’s and unions’ Measure 97 snake oil?