Tag: tax

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Tax Relief Can Slow the Spread of COVID-19 Financial Panic

By Eric Fruits, Ph.D.

The coronavirus is already taking a toll on our pocketbooks. Families are facing layoffs. Businesses are closing—and some may never reopen. Our elected leaders are urging everyone to do their fair share. Property owners have been asked to give tenants a six-month grace period to pay their rents. They’re considering forcing small businesses to provide paid sick leave to their employees. That means property owners won’t have the money they need to pay their mortgages and property taxes. That means small businesses will be spending money on workers who aren’t working.

Oregon politicians have been silent on how government is going to do its fair share to relieve the burden of COVID-19. They need to do more than just promise more facemasks and testing kits.

People need cash, but they don’t want handouts. And that’s where state and local governments can help out. Now.

For years, Oregon politicians have been loading new and higher taxes on its people and businesses. They had a permanent prosperity mindset. They believed employment would always increase, wages would always grow, and the stock market would always rise. Year after year, more and more taxes were added—just the price of a latte a week, they’d tell us. But, it all adds up. Property taxes, gas taxes, business taxes, and payroll taxes are just a few of the nibbles that over time have added up to a big bite out of our wallets. It’s time to let us keep some of that money until this crisis passes.

First, the state and local governments must give everyone an automatic six-month extension to file—and pay—their income taxes. Families need that money more than the government.

Next, the Kicker. Oregonians are due for $1.5 billion in Kicker refunds this year. That’s about $350 for the average taxpayer. Instead of waiting to get a credit on this year’s tax return, the state should send out Kicker checks. That’s what the state used to do. Plus, it’s not new spending, it’s money that’s already owed to taxpayers.

As an emergency measure, the governor should order the Oregon Department of Revenue to delay implementation of the Corporate Activities Tax (CAT) for another year. The CAT’s implementation has been chaotic, and many businesses don’t know if they owe money or how much they owe. The first of the quarterly CAT payments are due April 30. Businesses struggling to survive the virus outbreak can’t afford to spend the time and money it takes to figure out this complex and uncertain tax.

Portland should suspend the Clean Energy Fund’s gross receipts tax on retailers. Portlanders need cash on hand now and businesses need to stay solvent. Solar panels can wait until the pandemic passes.

Now’s the time for Portland to kill its Arts Tax and stop its collection efforts. In this time of worry, the city can bring a small piece of relief to the region by ending its hated Arts Tax. The first mayoral candidate who promises to get rid of the Arts Tax has a good shot at being Portland’s next mayor.

Metro should pull its May 2020 ballot measure that would impose two new income taxes on families and businesses. Portland Public Schools should stop the clock on its $1.2 billion school construction bond. Multnomah County should realize the folly in raising taxes for free preschool when students across the state are on a near-permanent Spring Break.

The age of permanent prosperity has come to a quick and unexpected end. Who knows when prosperity will return? Our leaders need to adopt a crisis mentality and work hard to make sure citizens stay solvent and businesses survive. Providing tax relief isn’t “austerity;” it’s action. Action that informs voters that the politicians they vote for care about them when leadership is needed most.

Government is rarely the solution to a crisis, but it can take concrete steps to stop today’s health care scare from turning into a financial panic.

Eric Fruits, Ph.D. is Vice President of Research at Cascade Policy Institute, Oregon’s free market public policy research organization.

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Portland’s Temporary Gas Tax Should Stay Just That

By Rachel Dawson

Portland’s temporary gas tax should stay just that: temporary.

Portland voters approved the 10 cent per gallon gas tax three years ago to fund a road repair and traffic safety program. Since its implementation, the program has failed to live up to all expectations.

Gasoline-using vehicles pay for 100% of the tax but only receive a little over half the benefits. Only 56% of tax revenues go to street maintenance projects, while 44% is spent on pedestrian and bicycle safety.

The program is also poorly managed. A 2019 audit on the tax found that program oversight has been ineffective, many projects have not been completed on time, revenue goals have not been met, and completed projects have cost $900,000 more than what was told to voters.

City staff admitted that project schedules were not realistic and took longer to begin “because the scopes of individual projects were not yet well-defined.” This lackadaisical approach to project planning would never fly in the private sector, so why is the city getting a pass?

Portland commissioner Chloe Eudaly will send the expiring gas tax back to voters in May 2020. The region needs better roads, not another poorly managed tax. For these reasons, Portlanders should vote “no” on extending the gas tax in 2020.

Rachel Dawson is a Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy research organization.

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QuickPoint! – “They Left Out Radio!” – The Human Genius Behind Economic Growth

By Kathryn Hickok

Bull market? Bear market? Growth? Uncertainty? What does 2019 have in store?

Economies are described in numbers, percentages, and quarterly comparisons. But the picture is richer than dollar values of production and consumption. No economy exists without millions of unique people bringing to the marketplace their creativity, intelligence, initiative, and effort. The knowledge, skills, and experiences of people are the true wealth of a society.

President Reagan once remarked on the limitations of economic predictions that can’t measure human genius. He said:

“You know, back in the twenties I think they did a report for Herbert Hoover about what the future economy would be like. And they included all their projections on industries and restaurants and steel, everything. But you know what they left out? They left out radio! They left out the fantastic rise of the media, which transformed the commercial marketplace….

“And now they make their projections, and they leave out high tech….”*

Fostering economic growth requires a tax and regulatory climate that’s friendly to businesses and the people who start them. The Oregon legislature should remember this when it convenes in February.

 

* Peggy Noonan, What I Saw at the Revolution: A Political Life in the Reagan Era (New York: Random House, 1990), 146.

 

Kathryn Hickok is Executive Vice President at Cascade Policy Institute, Oregon’s free market public policy research organization.

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