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THE DAILY ASTORIAN • FRIDAY, APRIL 13, 2018
editor@dailyastorian.com
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OUR VIEW
Governor playing politics with tax breaks
G
ov. Kate Brown is trying to have it both ways. She’s taking a tax break from
Oregon businesses and she’s calling a special legislative session to give busi-
nesses a tax break.
If that sounds like election-year posturing by a governor who is seeking reelection,
well, it is.
Brown riled Republicans and busi-
state over SB 1528.
ness leaders last week by announc-
Boquist contends the bill raises
ing she would sign Senate Bill 1528,
taxes and thus needed a supermajority
passed a few weeks ago by the Oregon
for passage in the Legislature. Instead,
Legislature. The bill is a reaction to con-
Democrats in the Senate and House
gressional passage late last year of the
passed it by simple majorities. Four
Tax Cuts and Jobs Act.
Democrats — including Scappoose Sen.
The federal law gave a tax cut to
Betsy Johnson — joined all Republicans
“pass-through” entities — businesses
in voting no.
whose profits or losses are passed
Meanwhile, Brown now wants the
directly to the owners and counted as
Legislature to hold a special session to
personal income for taxation purposes.
give sole proprietorships a tax break.
Such businesses generally are organized
If this sounds confusing and purely
as sole proprietorships, LLCs, partner-
political, well, again it is.
ships or S-corporations.
During a special legislative session
The state legislation, SB 1528,
in 2013, Democrats gained Republican
stops that tax break from also apply-
support for the so-called “Grand
ing to Oregon income taxes. As Brown
Bargain” by including a break for LLCs,
explained, such businesses still will get
partnerships and S-corporations. Sole
their federal tax cut but not the same cut
proprietorships were left out of that
in their state income taxes. Thus, the
deal, and Brown now says that was
state will collect more tax revenue.
unfair to them.
Brown said that’s not a tax increase,
The 2019 Legislature could make
just a lack of tax cut.
that change, even retroactively for this
Opponents disagree. One of them,
year. Instead, Brown said she would
state Sen. Brian Boquist, R-Dallas, con-
order lawmakers to hold a special ses-
firmed this week that he will sue the
sion before June 30, asking them to
AP Photo/Don Ryan
Gov. Kate Brown wants to call a special legislative session .
broaden the 2013 small-business tax
break to include sole proprietors.
Meanwhile, many of her fellow
Democrats, particularly in the state
House, have been trying to undo the
overall 2013 tax break. And last week,
Brown would not commit to whether
the 2013 tax break was good long-term
public policy. Neither was she ready
to discuss tax reform, which she previ-
ously said would be a critical issue for
the 2019 Legislature.
Boquist is right. Holding a special
legislative session is about politics, not
good government policy.
OUR VIEW
Applauding the return
of voters’ pamphlet
T
he Clatsop
County Board of
Commissioners
deserves a collective pat on
the back for deciding to rein-
state the voters’ pamphlet.
Earlier this year, a group of
citizens lobbied to bring back
the publication, which high-
lights candidates and issues,
offering facts not endorse-
ments. The county produces
one for busy elections in
even-numbered years, but had
stopped producing one on
odd years when more minor
boards and one-time ballot
measures are determined.
The residents, speaking as
individuals but with a united
theme, urged county leaders
to reconsider, saying the pam-
phlet was most needed when
these less newsworthy issues
and smaller boards are on the
ballot.
After some study, and a
review of financial and practi-
cal implications, county lead-
ers agreed to reinstate the
pamphlet for all elections.
It’s pleasing when govern-
ment is responsive to the pub-
lic’s needs. And when it hap-
pens, it is appropriate to point
it out.
GUEST COLUMN
Obamacare’s very stable genius
F
ront pages continue, understandably, to be
dominated by the roughly 130,000 scandals
currently afflicting the Trump administration.
But polls suggest that the reek of corruption,
intense as it is, isn’t likely to dominate the midterm
elections. The biggest issue on voters’ minds
appears, instead, to be health care.
And you know what? Voters are right. If
Republicans retain control of both houses of
Congress, we can safely predict that they’ll
make another try at repealing
Obamacare, taking health insur-
ance away from 25 million or 30
million Americans. Why? Because
their attempts to sabotage the pro-
gram keep falling short, and time
is running out.
PAUL
I’m not saying that sabotage
KRUGMAN has been a complete failure.
The Trump administration has
succeeded in driving insurance premiums sharply
higher — and yes, I mean “succeeded,” because
that was definitely the goal.
Enrollment on the Affordable Care Act’s
insurance exchanges has also declined since
2016 — with almost all the decline taking place in
Trump administration-run exchanges, rather than
those run by states — and the overall number of
Americans without health insurance, after declining
dramatically under President Barack Obama, has
risen again.
But what Republicans were hoping and
planning for was a “death spiral” of declining
enrollment and soaring costs. And while constant
claims that such a death spiral is underway have
had their effect — a majority of the public believes
that the exchanges are collapsing — it isn’t. In fact,
the program has been remarkably stable when you
bear in mind that it’s being administered by people
trying to make it fail.
What’s the secret of Obamacare’s stability? The
answer, although nobody will believe it, is that the
people who designed the program were extremely
smart. Political reality forced them to build a Rube
Goldberg device, a complex scheme to achieve
basically simple goals; every progressive health
expert I know would have been happy to extend
Medicare to everyone, but that just wasn’t going
to happen. But they did manage to create a system
that’s pretty robust to shocks, including the shock
of a White House that wants to destroy it.
Originally, Obamacare was supposed to rest on
a “three-legged stool.” Private insurers were barred
from discriminating based on pre-existing condi-
tions; individuals were required to buy insurance
meeting minimum standards — the “individual
mandate” — even if they were currently healthy;
and subsidies were provided to make insurance
affordable.
Republicans have, however, done their best
to saw off one of those legs; even before they
repealed the mandate, they drastically reduced
outreach efforts in an attempt to discourage healthy
Americans from enrolling.
The result has been that the population actually
signing up for coverage is both smaller and sicker
than it would otherwise have been, forcing insurers
to charge higher premiums.
But that’s where the subsidies come in.
Under the ACA, the poorest Americans are
covered by Medicaid, so private premiums don’t
matter. Meanwhile, many of those with higher
incomes — up to 400 percent of the poverty line,
or more than $95,000 for a family of four — are
eligible for subsidies. That’s 59 percent of the
population, but because many of those with higher
incomes get insurance through their employers, it’s
83 percent of those signing up on the exchanges.
And here’s the thing: Those subsidies aren’t fixed.
Instead, the formula sets the subsidy high enough
to put a limit on how high premium payments can
go as a percentage of income.
What this means is that of the 27 million
Americans who have either gained coverage
through the Medicaid expansion or purchased
insurance on the exchanges, only about 2 million
are exposed to those Trump-engineered premium
hikes. That’s still a lot of people, but it’s not
enough to get a death spiral going. In fact, for com-
plicated reasons (“silver-loading” — don’t ask),
after-subsidy premiums have actually gone down
for many people.
And that leaves the GOP very, very frustrated.
From the beginning, Republicans hated
Obamacare not because they expected it to fail,
but because they feared that it would succeed, and
thereby demonstrate that government actually can
do things to make people’s lives better. And their
nightmare is gradually coming true: Although it
took a long time, the Affordable Care Act is finally
becoming popular, and the public’s concern that the
GOP will kill it is becoming an important political
liability.
What this says to me is that if Republicans
manage to hold on to Congress, they will make
another all-out push to destroy the act — because
they’ll know that it’s probably their last chance.
Indeed, if they don’t kill Obamacare soon, the next
step will probably be an enhanced program that lets
Americans of all ages buy into Medicare.
So voters are right to believe that health care is
very much an issue in the midterm elections. It may
not be the most important thing at stake — there’s a
good case to be made that the survival of American
democracy is on the line. But it’s a very big deal.
Paul Krugman is a syndicated columnist for the
New York Times News Service.
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