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In anti-tax Oregon, voters consider tapping the rich

Two measures will test how willing residents are to increase taxes on those theoretically best equipped to pay them -- the wealthy and big companies.

January 26, 2010|By Kim Murphy

"I have a small business" with 20 employees, said Brent DeHart, who owns a gas station and aviation fueling company in Salem. "And with the new minimum, my taxes are going to go to $4,000. Let me tell you, my company doesn't have $4,000. We're literally going into debt right now to continue operations."

For households, the tax rate would increase 1.8 percentage points on taxable income from $250,000 to $500,000, and 2 percentage points above $500,000. For individuals, those increases would kick in at $125,000 and $250,000.

The state's largest newspaper, the Oregonian, is opposing both measures.

"Measure 66 is not about fairness," the paper said in an editorial. "It is about raising $472 million in taxes during one of the worst recessions in Oregon history to cover a gaping hole in the state budget."

Pat McCormick, spokesman for the anti-tax campaign, said Oregon's biggest business groups voluntarily forfeited their 2% "kicker" rebate in 2007 to create a $300-million rainy day fund for the state. Last year, they proposed a "shared responsibility plan" to help get around the budget shortfalls. That plan advocated a temporary income tax increase for all wage-earners and an increase in the $10 corporate minimum tax to $300.

"Typically in these kind of budget circumstances, in recessions, there's been a point where players are in a dark room and everybody coughs up a little, deals are made and the participants go out and get the votes to make sure that the compromise is going to be effected. That never happened," McCormick said.

Democrats, with a 36-24 majority in the state House and an 18-12 edge in the Senate, pushed forward with little Republican support.

"They looked back at those two previous [failed] across-the-board measures and said it does not make sense in a recession to raise everybody's taxes," Hunt said. "It does make sense to ask those who are continuing to do well to do a little bit more to protect critical services for everybody."

A number of business owners support the tax increases, arguing that they are a reasonable price to pay to stave off cuts that would add pressure to schools, public safety, health and welfare.

"These taxes are minuscule," said Arthur Graham, who owns an artists' paint manufacturing company. Graham estimated he would wind up paying $150 in corporate tax and "considerably more" in personal income tax. But he is willing to do it, he said.

"Is it going to prevent me from going out and buying a new Porsche? No, it isn't," Graham said. "But what about the benefits it provides to all the people in Oregon?"

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