That’s what it sounds like some Portland voters are saying when they voice support for Measure 26-260 to maintain the city’s parkswith a five-year levy that would increase the rate of taxation from 80 cents to $1.40 per $1,000 of assessed value, a massive 75% increase.
What business would reward a division’s mismanagement and profligacy by giving it more money?
What citizen would tolerate giving more money to a bureaucracy that has consistently failed in its mission while boosting its employment ranks? In 2020, Portland Parks and Recreation had 566 full-time employees. As of January 31, 2025, it had 792 full-time employees, almost a 30%increase. Good grief.
What voters already burdened with absurdly high taxes in an uncertain economy would purposefully burden themselves even more? What voters are unconcerned about the Legislature passing the $4.3 billion gas tax/wage tax bill Governor Kotek is eventually going to sign, particularly when, as numerous economists are observing, folks at the top part of the income and wealth distribution are doing fabulously well, but the other 80% are getting worried.
According to the Tax Foundation, an independent, nonpartisan non-profit research think tank, Portland residents already face some of the highest taxes in the country. “City, county, regional, and state taxes on individual and both net and gross business income combine to create a crushing tax wedge, yielding some of the highest marginal rates on wage income nationwide,” the Tax Foundation says.
What citizen would reward a bureaucracy that, according to a fiscal management audit released on Oct. 15 by the Portland City Auditor’s Office, “…has not taken a systematic approach to finding and implementing cost-saving, revenue-generating or service-reduction strategies.”
Then again, Portland voters have a history of tolerance for, even endorsement of, ineffective government.
In a May 2025 special election, Portland voters, ignoring cautionary arguments, supported Measure 26-259, a $1.83 billion bond to completely rebuild or renovate three high schools, the largest school bond in Oregon history, ignoring projections that there won’t be nearly enough students to fill them. The Oregonian also reported that the new schools would be three of the most expensive high schools ever built in the United States.
The massive spending will also result in space for 15,300 high school students, while Portland State University’s Population Research Center projected in July 2024 that the Portland School District will only have about 10,700 students by 2039.
The last thing Portland needs now is another irresponsible spending measure. Vote NO on Measure 26-260.
The liberal Oregon Center for Public Policy (OCPP), in its never-ending quest to soak the well-off, is advocating a big change in how capital gains are taxed.
The problem is the idea is misguided, unworkable and would hit Oregon’s middle class as well.
And if If you think the federal tax code is complex and labyrinthine now, you ain’t seen nothin yet if mark-to-market is put in place.
In the name of addressing income inequality, OCPP is proposing that capital gains on assets be paid annually rather than when the assets are sold, as under current law. In other words, if the value of your assets such as stocks, bonds, real estate, a business, or even a work of art. goes up, you would owe taxes on the increase, even if you didn’t sell anything. The proposed approach is called “mark-to-market”.
“Oregon currently has several tax breaks favoring capital gains income that collectively cost the state more than $1 billion per budget period,” the OCPP says in a just posted issue brief. “Lawmakers should reject any proposal to further cut taxes on capital gains income and reign in tax breaks that benefit capital gains income.”
The current system “allows the wealthy to amass vast fortunes,” OCPP argues. “Because such assets are highly concentrated in the hands of the rich, the income produced by the sale of those assets flow to the top,” the issue brief says.
One major problem with the mark-to-market proposal is that, despite OCPP’s attempt to position it as a tax-the-rich idea, it would affect all investors.
OCPP’s proposal would also be a nightmare to implement, particularly because it would require taxpayers to value assets annually.
And a share’s price at the end of a year reflects an unrealized gain or loss unless it is sold. As the Wall Street Journal has explained, ” A tax on unrealized capital gains thus amounts to a tax on unrealized future profits that in many cases will never be realized, except at losses—especially if added taxation increases the likelihood of unrealized profits. Remember Kmart, RadioShack and Blockbuster? Their stockholders once had unrealized capital gains.” At the end, they had nothing.
Changes in stock prices of publicly traded companies are usually easy to determine. Figuring the changing value of many other assets can be a lot tougher.
“Ownership of private businesses, artwork…and other luxuries, among other assets, are difficult to appraise,” according to the National Taxpayers Union Foundation. “These assets may have limited markets for them, or no markets at all, making valuation a guessing game. In such a scenario, naturally the incentive for a taxpayer will be to minimize the value of such assets while the incentive for revenue officials will be to maximize the value, setting up a highly-adversarial relationship that could lead to administrative difficulties from lack of independently-verifiable comparisons.”
OCPP’s proposal could also artificially drive down market prices. Savvy stock market investors, knowing their taxes will be impacted by their portfolio’s value at the end of each year, will be inclined to sell assets, driving down stock prices to minimize tax liability.
In an October 28, 2021 paper, the Congressional Research Service said another concern about mark-to-market is liquidity. Some high-income individuals may have no problem coming up with the necessary cash. Others, particularly middle-income taxpayers, might have a hard time doing so.
As S-Corporation Association of America put it, “…unrealized gains are not income. You can’t spend them. If you could, they’d be realized gains. And while the (Washington) Post and other observers are fond of talking up the ability of billionaires to borrow, most S corporation owners don’t have unlimited borrowing capacity. Depending on how leveraged their business is, they might have no capacity at all.”
Or as the National Taxpayers Union Foundation has opined, “Just because an investor’s underlying assets appreciate in a given year does not mean that the investor has sufficient cash to pay any tax liability.”
In short, OCPP’s mark-to-market proposal is a half-baked idea. It deserves a quick demise.
ADDENDUM:
On Jan. 17, 2023, the Washington Post reported that a group of legislators in statehouses across the country has coordinated to introduce bills simultaneously in seven states later this week, with the same goal of raising taxes on the rich.
“The point here is to make sure we do at the state level what is not being done at the federal level,” said Gustavo Rivera (D), a New York state senator who is part of the seven-state group.
The state legislators said they would like to try such ideas as a test case for future national policy while acting collectively to minimize the threat of people moving to a nearby lower-tax state. Sponsors told The Washington Post that they will introduce their bills on Thursday, January 19, in California, Connecticut, Hawaii, Illinois, Maryland, New York and Washington.,
Skeptics of wealth taxes say the idea might be even worse on a state level than a national level, since the rich can easily move to another state, the Post reported.
“High net-worth individuals are fairly mobile, and it is much easier to change residency to another state than it is to leave the country,” said Jared Walczak, who works on state tax policy at the right-leaning Tax Foundation.
In addition, he says, assessing the value of a person’s wealth would be challenging for state bureaucrats and sometimes lead to unfair results, as in the case of Silicon Valley founders, whose companies may have huge valuations on paper that are hard to assess or tax in a straightforward way.
“Just because a company might sell for hundreds of millions of dollars in the future doesn’t mean that its current owners have any significant wealth,” Walczak said. The on-paper net worth of billionaires fluctuates drastically as companies’ stock prices or valuations rise and fall, making it hard to figure out how much they should pay if taxed on that wealth, he added.
In four states, lawmakers say they will float versions of a tax on wealthy people’s holdings, or so-called “mark-to-market” taxes on their unrealized capital gains. But other states will pitch more conventional tax proposals.
To the long list of issues dividing a factious America, add one more.
Since Donald Trump’s election, the chorus of people bitching about some states contributing more in taxes to the federal government than they receive back in Federal spending has gotten louder.
Source: Giving or Getting? New York’s Balance of Payments with the Federal Government, Rockefeller Institute of Government, January 22, 2020
A January 2020 report from the Rockefeller Institute of Government calculated that forty-two states, including Oregon, had a positive balance of payments with the Federal government for 2018, each receiving more Federal spending than taxpayers remitted in Federal taxes and other Federal revenues. But eight states, including New York, had a negative balance of payments in 2018.
New York consistently holds itself up as the biggest loser in terms of what states give and get. According to the Rockefeller Institute report, New York sent $22 billion more in taxes to the federal government in 2018 than it received back and $116.2 billion more over the past four years.
New York Governor Andrew Cuomo argues New York is the “number one giver” of federal tax revenue and has been “bailing out red states for decades.”
“We believe this report is essential reading for policymakers and advisors in Congress and the executive when determining “winners” and “losers” in upcoming federal policy debates.,” wrote Patricia Strach, Interim Executive Director of the Rockefeller Institute.
But focusing on “winners” and “losers” in the allocation of taxes is a mistake that sets the stage for even greater polarization that will undermine the country’s strength.
You only need to look at the chaos that ensued under the Articles of Confederation went into effect in March 1781 to see the folly of putting state’s rights over the common good. As George Washington put it, the states needed to abandon “local prejudices and policies” for “the interest of the community.”
What was needed Washington and many other leaders many leaders concluded was a more complex, centralized government under a new constitution formulated at a convention of state delegates.
On Nov. 23, 1786 Virginia’s General Assembly adopted an act making it clear the states had “…to decide the solemn question – whether they will, by wise and magnanimous efforts, reap the just fruits of that independence which they have so gloriously acquired and of that union which they have cemented with so much of their common blood – or, whether by giving way to unmanly jealousies and prejudices, or to partial and transitory interests, they will renounce the auspicious blessings prepared for them by the revolution…”
The Constitution that emerged from the Constitutional Convention in Sept. 1787 was a momentous achievement that set the foundation for a vibrant, unified nation. Complaints about the distribution of federal tax revenue among the states can only undermine national cohesion.
Far better to understand that in a system with progressive taxes, where wealthier people pay more and extra money is redistributed to people in need, states with wealthy residents will give more than they get.
Moreover, as the Tax Foundation wrote in a Special Report, strictly considering whether a state gets as much as it pays in isn’t “a very civic minded view of federal government. Presumably citizens pay federal taxes to provide for the common defense and to support other national programs that benefit the nation as a whole.”
Focusing on the uneven balance of payments just spurs more national divisiveness (as if we don’t have enough already) and draws attention away from America’s need for a commitment to justice and equality.
As the COVID-19 signs say, “We’re all in this together.”
ThinkingOregon 