Every state in the nation is suffering through the current economic downturn, which was largely created by bad policies and bad actors outside our own communities. Many states are pondering tax increases in the short term to help fight off the chaos that is sure to come from more massive budget cuts.
That's why The Skanner News is reluctantly endorsing Measures 66 and 67 on the special election ballot for Jan. 26.
These measures are little more than band aids on our hemorrhaging state economy. In the long term, neither will help stabilize state spending, neither will encourage Republicans and Democrats to work together productively in Salem, and it's a certainty that we'll be over the same barrel next time lawmakers square off over a statewide spending plan in 2012.
It's not hard to see where the nation's money has gone over the past few years: hundreds of billions of dollars have disappeared into wars that only seem to deepen over time; homes and properties have been massively devalued by the collapse of the real estate bubble; and the operating capital of many businesses has dried up despite the federal government's bailout of the big banks with taxpayers' money.
Sadly, from coast to coast local communities have now been left to fight over crumbs and come up with their own ideas on how to fill the gaps left by the larger financial crisis – including emergency tax hikes.
Oregon has a bitter record of conflict on ballot initiatives that rewrite the tax code. Efforts to cut taxes through the voter system go back decades in this state, and historically touch off violently partisan exchanges that do little to help the average voter figure out their long-term consequences.
Measures 66 and 67 offer the perfect example. Both originated as Democratic lawmakers' efforts to plug a state spending hole estimated at more than $775 million over the next two years. Partisan anger over the Democrats' proposed tax hikes eventually landed them on the ballot for voters to decide.
Measure 66 raises income taxes for individuals earning between $125,000 and $250,000; it also rolls back taxes for individuals on unemployment.
Measure 67 raises the corporate minimum tax from $10 to $150 per year; it raises taxes on companies that register a profit from 6.6 percent to 7.9 percent; and it would create a new corporate tax applied only to companies reporting $500,000 or more in sales that claim no profits, requiring them to pay either the minimum corporate tax or 7.9 percent of their sales, whichever is higher.
Democrats say it's fair to expect those with the most money to pay more to keep the state afloat during tough economic times; Republicans argue that the richest Oregonians already unfairly pay the most in taxes.
We fear that Oregon is being held hostage by a polarized state legislature that can't find agreement on the basics. If our choices are only to tax the state's vital business sector or pull the plug on crucial services across the board – then that is a failure of leadership and an indictment of the faults within the two-party political system.