Measures 66 and 67
On January 26, 2010 Oregon voters approved two legislatively-enacted tax increase measures. Before the election, Cascade Policy Institute asked two prominent Oregon economists, Drs. Randall Pozdena and Eric Fruits, to analyze the impact that these measures will have on the state economy. Using two different methods, they concluded that the earlier preliminary estimates by Drs. William Conerly and Randall Pozdena of 70,000 jobs lost over time are…
…entirely plausible and may even be conservative. Their study looks at more than just job losses, and cites a large body of economic literature that clearly demonstrates the negative effects of raising marginal tax rates on economic growth and employment growth.
The following appeared on the Oregon January 26, 2010 ballot for Measures 66 and 67.
Oregon economists provide more than 70,000 reasons to oppose Measures 66 and 67
We are consulting economists who have studied the economic impact of the legislature’s corporate and personal tax increases. Measure 66 and 67′s tax increases will cost more than 70,000 jobs if you combine our separate calculations for the corporate and personal income tax increases.
Pozdena concludes that the corporate tax rate increase would cost the state between 22,000 and 43,000 jobs in 10 years. Conerly concludes the personal tax increase would cost 36,000 in 10 years. No prediction is exact, but we both believe these tax hikes will cause growing job losses for Oregon.
The background for our opinions is on the web at: www.CascadePolicy.org. You will find that our views are shared by the OECD, a 30-country organization that studies factors affecting economic development. But our conclusions are also simple, common sense.
Capital and people are mobile – especially for the corporations and high-income households targeted by the legislature. If they move, we lose jobs that their businesses, spending and investment create. Even for those staying, the higher rates sap the motivation to work harder and create more jobs.
Pozdena’s estimates of corporate tax effects are based on analyses of country-to-country movements of capital, but state-to-state movements are even easier for companies. His job loss estimates, therefore, are probably low.
People also do not want the benefits of their extra effort taxed away. Already, Oregonians selling businesses often move to Washington to avoid Oregon’s taxation of personal capital gains. Others can take their job anywhere the Internet connects. Recruiting and motivating workers is harder with high income taxes. Targeting our economy’s heroes – successful business people and workers who’ve achieved success in 21st century industries – is job suicide.
Higher tax rates will cost Oregon jobs now, and slower growth will hamper Oregonians’ job prospects long into the future. Please vote no on Measures 66 and 67.
Randall Pozdena, PhD
William Conerly, PhD
