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CONTACT: Steve Buckstein
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Supporters of higher taxes in Oregon are desperate to debunk the overwhelming economic logic that the personal and corporate income tax increases in Measures 66 and 67 on the January ballot will result in tens of thousands of job losses.

Oregon Center for Public Policy asked economists at the Tax Policy Center in Washington, D.C. to challenge the analysis of two prominent Oregon economists, Bill Conerly and Randall Pozdena, which find that some 70,000 jobs will be lost if the two tax measures go into effect.

The Tax Policy Center economists, Roseanne Altshuler and Kim Rueben, came out with a four-page analysis attempting to discredit Conerly and Pozdena’s work.  But even in trying to do so, Altshuler and Rueben admit that “…the corporate income tax (and personal income tax) may place a drag on the economy…” and they go on to state that  “…the lack of a retail or wholesale sales tax in Oregon tends to encourage productive activity.”

In making the statements above, these critics confirm two of Conerly and Pozdena’s key assumptions:

1. Increased taxes have detrimental effects on the economy. 

2. Reducing tax liability improves productivity.

In responding to the Tax Policy Center authors, Bill Conerly noted that their criticism of his current work relied on differences the Center had with another analysis he did on another tax four years ago. Nothing in the Center’s report dealt with his current analysis, which found that some 30,000 jobs will be lost if Measure 66, the personal income tax increase, goes into effect.

Randall Pozdena noted that the Center criticized his analysis of 40,000 job losses from Measure 67, the corporate tax increase, by faulting his reliance on a study which included non-industrial countries.  Yet the same type of study, performed on ONLY industrialized countries by the OECD, reached the same conclusion as Pozdena and Conerly:  “Corporate taxes are found to be most harmful for growth, followed by personal income taxes….”  

Furthermore, Pozdena stated in his original analysis that, although his estimates are derived using studies based on country comparisons, tax competition among states is likely higher than among countries, resulting in greater leakage of jobs to the states that tax corporate incomes at lower rates.

Cascade Senior Policy Analyst Steve Buckstein welcomed the scrutiny of his institute’s work.  “As tax proponents have stated, the stakes are very high in this election.”

“I’m glad to see that even the Tax Policy Center economists agree with Cascade’s economists that higher taxes can place a drag on the economy,” Buckstein said. “The only question now is how much of a drag these new taxes will place on Oregon’s already dragging economy.”

“If 70,000 Oregonians who have jobs now lose them because of these tax measures, or if 70,000 Oregonians looking for work can’t find it because of these measures, I’m confident that Oregon voters will see that as too high a price to pay, and will vote NO on Measures 66 and 67 in January.”

Relevant documents:

Examination of Oregon’s Proposal to Raise the Top Corporate Tax Rate and Top Personal Income Tax Rates
Tax Policy Center, Roseanne Altshuler and Kim Rueben

Taxing the “Wealthy” More Will Cost 36,000 Oregon Jobs
by William Conerly, Ph.D.

Raising Oregon’s Corporate Income Tax Rate Will Cost 43,000 Oregon Jobs
by Randall Pozdena, Ph.D.

 

One Response to “Cascade Policy Institute Stands by Economic Analysisof Job Losses due to Measures 66 and 67”

  1. Christopher December 8, 2009 at 10:14 pm #

    Those of us who oppose tax increase are often branded as anti government when, in fact, we are pro-citizen, pro-transparency, pro-accountability and pro-community. We see the codependent relationship between those who want a subsidized reality and those who are deathly afraid of any who oppose a subsidized reality.

    We voters may decide against a tax increase but we won’t get to decide where the retribution of spending cuts will be made by a government that has been cowed by Public Income Indemnification Associations, i.e. the SEIU503 and other public unions that are becoming more of a conflict of interest as time passes. How much of the alleged budget shortfall would be lessened if the benefits of organized public employment were decreased because union dues in the public sector could no longer be used for lobbying purposes? How democratic is it that Oregons public employees may not direct where their dues are spent, much less opt out of their union?

    How many of we Oregonians enjoy the luxury of only considering one side of our personal financial ledger? The prerequisites and authority of the organized few outweigh the votes and needs of the many as is seen by such things as The Oregon Worker Freedom Act. Evidently the labor movement, which supports the new welfare state of public employment via increased tax, fees, rates and regulations hasn’t watched what happened to the UAW, Delphi or the results of the latest SWG strike.

    Those of us who oppose organized labor do so because we see the union as one more boss and the likes of Andy Stern or Richard Trumpka as the Bernie Madoffs of organized labor as they bail with their golden parachute, courtesy of the worker, after they have suckered enough people into their Ponzi scheme by promising what is too good to be true. Organized labor in the public sector is a part of the budget condition that no one wants to talk about because it has become a prohibitively expensive embarrassment for everyone involved.

    Oregon government, at any level, couldn’t pass muster on a Sarbanes Oxley audit if their lives depended on it and throwing more money at the short falls, whether we have the money or not, isn’t the way to fix the problems. There is nothing the organized labor accomplishes in the public sector beyond lining the pockets of its administrators and it is time for some transparency, forced or voluntary, to take place.

    Where is the fiscal conscientiousness in a policy that requires complete expenditure of a per annum budget lest subsequent budgets be decreased? How progressive is it to disregard a bid process under the guise of expediency? Oregon can do a lot better than this and it is time Oregonians stopped the flow of gravy at the public trough.

    The Cascade Policy Institute would serve Oregon well to illustrate, in no uncertain and in factual terms, the money trail from the rate/fee/tax and regulatory victim to the perpetrator. Whether it amounts to suing Oregon government for records under the FOIA or forcing bureaucrats to refute assertions, it is time for Oregon government to come clean.

    Food for thought;

    How about an initiative that required regular audits of all levels of government by outsiders that would be picked by lottery? Eligible auditing groups would be from outside the state of Oregon with no connections to anyone in any form of government. Some in the group will be certified public accounts, some will be actuaries from the banking and insurance industries, some will be economics professors and perhaps some of their students will come along for the ride. The auditing group will work pro bono and a report will be made available, in laymans terms, to the general public. Oregonians deserve to watch their leaders reach into a hat and draw the names of the folks who will do the auditing. That actuarial data retrieved from such a practice would lead to a stampede by potential auditors and an exodus by the shills that have been playing taxpayers for fools.

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