Jan. 1, 2010:NWLP
12/28/09
11:37 AM
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...97% of taxpayers not impacted by measures
(From Page 2)
whose members frequently employ
union building trades workers, wrote in
the Voter’Pamphlet that 86 percent of its
1,100 members are small family-run
businesses with 10 or fewer employees,
and virtually all are suffering losses in
the recession. But then it says that Meas-
ures 66 and 67 require its members to
pay up to $100,000 even when they are
losing money. The taxes “will leave
many of our members little choice but
to curtail benefits, consider additional
layoffs, or sadly, close down entirely.”
It doesn’t add up. Under the meas-
ures, if a small business is losing money,
it won’t have profits to tax as personal
income, and its minimum tax will be
$150. The $100,000 tax bill AGC men-
tions is on companies with over $100
million a year in Oregon sales. Those
are not small, family-run businesses.
John Mohlis, executive secretary-
treasurer of the Columbia Pacific Build-
ing and Construction Trades Council, is
skeptical that the tax increase would
lead to job cuts. “Whether there are jobs
has to do with the volume of work, not
the size of the tax bill,” Mohlis said.
“Right now, there’s just not much con-
struction work.”
Oregonians Against Job-Killing
Taxes continues to repeat its argument
that the tax increases will hurt small
business and ordinary people, but their
real impact is on large corporations and
wealthy individuals like the ones fund-
ing Oregonians Against Job-Killing
Taxes. Of the close to a million dollars
raised during the campaign’s signature
gathering phase, contributions of less
than $100 totaled less than $1,500. The
donors list is almost entirely business
groups, big corporations, and million-
aires. The Oregon Bankers Association
gave $100,000. Associated Oregon In-
dustries gave $125,300. AGC gave
$38,497. Weyerhauser gave $51,194.
Plaid Pantry chipped in $10,000. Loren
Parks, long-time funder to union foe Bill
Sizemore, gave $75,000. Timothy
Boyle, who made $800,000 as CEO of
Columbia Sportswear in 2008 (and $1.7
million the year before), gave $10,000.
Nike founder Phil Knight, whose per-
sonal net worth is estimated to be $8.2
billion, gave $50,000.
It wouldn’t serve their cause to put
Knight on a flier complaining about the
2 percent more he would pay on earn-
ings from the $150 million in Nike stock
he reportedly sold in October. So Ore-
gonians Against Job-Killing Taxes
makes “jobs” the heart of its campaign.
They claim “economists” say the meas-
ures will cause 70,000 jobs to be lost —
a figure repeated in 28 separate state-
ments in the Voters’ Pamphlet.
[See the adjacent article “Lying by
Numbers” for how they came up with
the number.]
“Their job loss claim,” Sheketoff said,
“isn’t worth the paper it’s printed on.”
But Speaker Hunt says they’re ignor-
ing the real, countable jobs the measures
create in the public sector, by funding
teachers, in-home caregivers, and con-
struction workers on state projects.
About 51 percent of the revenues raised
go to schools (K-12, community col-
lege, and state universities); 27 percent
pays for services, including health in-
surance for children, seniors, and the
disabled, with matching federal dollars;
18 percent pays for public safety (pris-
ons, jails, and courts); and 4 percent
funds other programs, including busi-
ness regulation.
To defend the measures, VoteYes for
Oregon has assembled a broad coalition.
They are raising money and turning out
volunteers to get facts out to voters.
“We’re letting people know if your
family doesn’t make $250,000 a year,
you’re not going to see a tax increase,”
said Elana Guiney, spokesperson for the
Oregon AFL-CIO. “Right now, two-
thirds of corporations pay $10 a year in
taxes, while the average family pays
$3,100 a year. When people find out
what’s really going on, most say they’ll
vote yes.”
On Sunday, Jan. 3,union members
will meet for a canvass. Call 503-224-
3169 for details.
Ballots go out Jan. 8. A “yes” vote is
a vote for the tax increases.
Lying by numbers
Oregonians Against Job-Killing Taxes claims that “economists” say Meas-
ures 66 and 67 will cause the loss of 70,000 jobs — a figure repeated in 28 sep-
arate statements in the Voters’ Pamphlet.
The economists referred to are Bill Conerly and Randall Pozdena, who con-
ducted their analyses for the Cascade Policy Institute, the same group that a few
years ago was calling for putting Social Security funds in the stock market. Con-
erly is chairman of the group’s board of directors, and Pozdena is its “academic
adviser.”
Reached by phone, Cascade Policy Institute Executive Director Steve Buck-
stein confirmed how Conerly and Pozdena came up with their analyses. See if you
can follow.
To assess the impact of Measure 66’s tax increase on very-high-income indi-
viduals, Conerly re-used an economic model he developed four years earlier to ar-
gue for a capital gains tax reduction. Based on that previous study of tax and eco-
nomic data from 50 states over 26 (or 27) years, Conerly concluded that for every
percentage decrease in the capital gains tax rate, the rate of economic growth
would increase by 0.091 percent. Reasoning that there’s no difference between
capital gains taxes and income taxes on high-income individuals, he then turned
that equation upside down to say that for every percent of income tax increase on
high-income individuals, the economic growth rate would go down by the same
factor. He then applied that factor to an old State of Oregon economic forecast to
conclude that for every year that passed, more and more jobs would not be cre-
ated by these rich individuals. In the first year, Conerly said, the impact would be
small — 5,570 jobs — but by 2015, the impact would total 36,000 jobs.
Pozdena did a similar thing for Measure 67’s corporate tax increase, only he
used as his basis a study of capital movements between different nations that be-
long to the Organization for Economic Cooperation and Development. Pozdena
concluded that the 1 to 2 percent increase in the corporate income tax rate would
cause the state’s growth rate to decrease 0.1 to 0.2 percent. Then, he applied that
to a state economic forecast from before the late 2008 economic meltdown to
come up with a figure of 22,000 and 43,000 jobs that would not be created by cor-
porations and rich individuals — over the course of 10 years. The common sense
explanation for this, Pozdena explained on Cascade’s Web site, is that people
would choose where to live and where to invest, and would invest less in Oregon.
Add the two, and you get 58,000 to 79,000 jobs not created by the private sec-
tor over five years … or 10 years. Buckstein explained that he took the top figure
in that range, 79,000, and tweaked it downward to make it a number of “full-time
equivalent” jobs, and that’s how the 70,000 jobs figure was born.
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