Oregon Decides to Tax Jobs, Not Suds

By June 21, 2009Economy, General, Taxation

Rather than target a single successful, homegrown industry — microbreweries — with a 1,900 percent tax increase, Oregon’s legislative majority has decided to be more inclusive, hitting a broader swatch of industry — especially small businesses. The political strategy is not to tax wage-earners, it’s to tax the people who pay the wages.

From The Associated Press, “Oregon lawmakers nix increasing beer, cigarette taxes in ’09“:

SALEM, Ore. – Proposed beer and cigarette tax increases have been shelved by Democratic legislative leaders who say they don’t want to increase the tax burden on working class people in these tough economic times.

But there’s another issue at play here – lawmakers also don’t want beer and cigarette tax hikes to drag down the big income tax increase package they’ve already passed to balance the next two-year budget.

The $733 million tax increase on corporations and upper-income households is central to the Democrats’ strategy to keep state services afloat by making some cuts, using reserves and stimulus dollars and trying to avoid raising taxes on lower- and middle-income Oregonians.

For more details on hefty increases on business and individual incomes, see the Corvallis Gazette-Times, “Businesses say tax hike will stifle recovery.” And the Wall Street Journal editorialized on the Legislature’s destructive course, “The Oregon Travail,” noting, “Another revenue raiser will tax hospitals and private health insurance premiums. That’s a good way to encourage private employers to drop their health coverage for workers.”

Back in the late ’60s and ’70s, Oregon Governor Tom McCall earned national attention for his generally good-natured anti-California campaigns. He told a CBS reporter, “Come visit us again and again. This is a State of excitement. But for heaven’s sake, don’t move here to live.”

McCall was guarding against the social and government costs brought by rising populations, but turns out it wasn’t the social ills or the pressure on schools and infrastructure that were the real danger. It was bad public policy, exported north from California.

Speaking of which, “California’s unemployment rate climbs to record 11.5 percent“:

LOS ANGELES (AP) – California’s unemployment rate climbed to 11.5 percent in May, the highest in modern record-keeping, the U.S. Department of Labor reported Friday…[snip]

 

Only four states had higher rates: Michigan, Oregon, Rhode Island and South Carolina. Indeed, Oregon’s 12.4 unemployment rate in May was the second highest in the nation.

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