Oregon at the Tax Crossroad

By January 15, 2010Labor Unions, Taxation

A Wall Street Journal editorial, “Oregon at the Tax Crossroad“:

Oregon’s unemployment rate is 11.1%, among the nation’s highest. But Oregonians are now voting by mail whether to endorse a pair of tax increases passed by the legislature last year: one to raise the state’s top personal income tax, to 11% from 9%, and another to raise the business income tax, to 7.9% from 6.6%. Both tax hikes would be retroactive to January 1, 2009.

Votes will be counted on Measures 66 and 67 on Jan. 26. The Journal regards the elections as a useful referendum on whether states can tax their way into prosperity, and it’s also a measure of the public employee unions’ political clout.

In recent weeks, national powerhouses AFSCME and the SEIU have poured close to $1 million into the state campaign to secure passage. Oregon’s public employees have one of the sweetest deals in America. Their average pay is about one-third higher than that of private Oregon workers, and Oregon public employees don’t have to pay anything toward their health-care benefits.

In the last budget, the Democratic controlled state legislature doled out a $259 million pay raise to the government work force, even as the state was facing a near $1 billion deficit. In the last three years, the state has added 25,000 new public employees while losing 40,000 private sector jobs. The union TV ads say the tax hikes are needed to preserve schools, roads and public services.

See our earlier post, “Unemployment at 11.1 Percent, and Oregon Would Raise Taxes?

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