The Oregonian, Nov. 25, 1999

Tax iniative would be taxing for most Oregonians

The wealthy would reap millions, the majority of citizens nothing; no source of make-up revenue

By Ken Lewis (to The Oregonian)

I was pleased to read your editorial, This isn't Sherwood Forest, Nov. 9, in which you stated, "Bill Sizemore proposes a tax break for the wealthy."

Let me share some details about why this initiative is a bad idea:

• Allowing full state deductibility of federal income taxes is unfair and regressive.
  • The 60 percent of Oregonians who make less than $40,000 per year would get no benefit.
  • The 20 percent of Oregonians who make between $40,000 and $63,000 would get a benefit of $130 per year.
  • The top 1 percent of Oregonians, who make more than $270,000 per year, with average income topping $700,000 per year, would get a benefit of more than $15,000 per year, and
  • The 9,000 Oregonians who make more than $300,000 per year would have a total benefit of $140 million per year. In other words, there would be, in effect, a transfer of close to $140 million per year from the state general fund to the 9,000 wealthiest oregonians.
• It is deceptive. This initiative has a total price tag of close to $1.6 billion -- about 14% of the general fund. The initiative does not indicate where the state can cut this much from education, law enforcement, or health care or the many other services thsat the state now provides. To promote a tax cut without also informing the voters of the effects of the tax cut is irresponsible.
• It is bad public policy. The initiative ould increase the gap in wealth between the richest Oregonians and everyone else -- and this gap is now greater than at any time in US history. (The Wall Street Journal recently reported that the wealthiest 10 percent held 73 percent of the country's wealth in 1997, up from 68 percent in 1968.)

The Sizemore initiative would further widen the gap between the wealthiest and everyone else because the wealthiest would receive large cuts in taxes and most Orgonians would receive no cut at all. The cuts in services that the initiative would cause are the very services that most Oregonians need: education, law enforcement, and others.

The Sizemore initiative would give a windfall to the wrong group of Oregonians -- the wealthiest -- who do not need the windfall, and who are now paying a smaller percentage of their income in state and local taxes than all other Oregonians. Under the existing state income tax law, which sets the top rate at 9 percent, the higher the income of the taxpayer, the smaller is the total percentage of his income paid for state and local taxes.

A recent study shows that Oregonians in the lower 80 percent of income-earners pay more than 9 percent of their income for state and local taxes and that Oregonians in the top 5 percent of income-earners pay between 7 percent and 7.6 percent of their income for state and local taxes.

The Sizemore initiative would make our current tax system more regressive and give no benefit to those who are already paying a high percentage of their income for state and local taxes.

Kenneth Lewis is a co-founder of a political action committee opposing the initiative, Oregonians for Fairness and Responsibility, P.O. Box 29140, Portland, OR 97296. He is a retired shipping executive who recently stepped down as chairman of the I Have a Dream Foundation.