Page 6 Portland Observer, March 23,1983
Sales tax opposition grows
(Continued fro m page I column 6)
bale, and il would make lax fo rm *
more complex.
Businett would tave if included in
the tale» tax p la n . B u x in e » now
pays over h a lf o f O regon property
taxes, and would get the same o f an
across-the-board rollback. Busincu
(an d farm e rs) w o u ld pay tax on
goods they need, but th a t w ou ld
come to only 20 to 40 percent o f the
to ta l. So business w ou ld get over
h a lf the benefits, w hile paying less
than half the coat, and some o f that
w ou ld be passed to consumers as
higher prices.
Under two o f the tales tax plans,
landlords w ould receive tax relief.
Renters w ould have to depend on
landlords* willingness to p a u on the
savings. When C alifo rn ia’s Proposi
tion 13— a tax lim itation m e a s u re -
passed in 1978, few saw their rents
drop.
I t ’ s not clear whether a tales tax
would be more regressive than pre
sent property taxes. M any observers
believe p ro p e rty taxes are a lto re
gressive. A study o f who pays prop
erty tax according to income will be
out in the next week from the Legis
lative Revenue O ffice.
W ho pays and who benefits under
each o f the three tax plans it sum
marized in the following chart. (Sev
eral Salem observers believe the Lo
cal Governm ent plan it most likely
to pass, since it's the least regressive
and doesn't include business.)
in 1969 to 37 percent today. As in
flation has kicked wage earners into
higher tax brackets, and rates fo r
business (and the w ell-to -d o ) have
stayed the same, business’ share o f
income taxes has fallen from 13 per
cent in 1978 to 9 percent today (this
is due also to falling profits), he said
later
Baugh &lso Mud tatei K x revenues
vary wildly with the business cycle.
During booms people borrow, and
spending exceeds income, but in de
pressions people save, and cut
spending to the bone. Since sales
taxes depend on spending on big-
ticket items, he said, states that de
pend on sales taxes, such as C a li
fo rn ia and W a s h in g to n , are in a
worse bind than Oregon. California
is iu u in g lO U t. Baugh pointed out
th a t the unem ployed co n tin u e to
pay tales tax, unlike the income tax.
State Sen. M a rg ie H endrickscn
(D-Eugene), said that as more wom
en become the sole breadw inner—
’ ’ the fem inization o f p o v e rty ,"—
women are especially affected by the
sales lax.
Ron Herndon o f the Black United
Front has criticized the tax for hav
ing the same effect on racial m inori
tie s
The O USST coalition will hold an
anti-sales tax rally at the State Capi
tol A p ril 13th, at noon. A forum on
the sales tax and o ther legislative
issues, sponsored by the C itizen s
P a rty and in c lu d in g the Black
U n ite d F ro n t and O regon F a ir
Share, w ill be held M arch 27, 4-6
W h o Pays
Business
Consumera
( Homeowners / Rentera)
Revenue
Local
Government
Pien
Courtney-
Van Vliet
Plan
Taxpayers for a
Better Economy
Plan
0
2-4 %
(2-8% tnltidRy)
8410 mNion
(eat.)
4%
4%
4%
8800 million
(eat.)
6%
6%
6%
•7-800 mAion
(set.)
40-60%
40-60%
Lendtorde-
- a t ---------- - ■ ------
oiecretion
No rebel
Schooin
4046%
4046%
Landlords'
discretion
26%
Schools
Who Benefits
Business
Homeowners
Rentara
No relief
60%
60%
Income tax peyera
Government
No relief
A llo c a i
governments
The opp o sitio n
A t a rally at the O range H a ll on
M arch 12th, the O U S S T co alitio n
criticized the talcs tax plans as un
fair and an unstable revenue source,
and supported altern atives. C o m
m u n ity g ro up leaders and D e m o
cratic legislators addressed a crowd
o f 130 at the hastily called event.
State A F L - C I O treasurer Bob
Baugh said Oregon’s tax system has
already become more regressive in
the past decade. H e said tax favors
given business by the L e g is la tu re
have led to business’ share o f prop
erty revenues falling from 68 pecent
p .m ., at the Friends H a ll, 4312 SE
Stark.
But State Rep. C arl Hosticka, (D -
Eugenc), who favors raising income
taxes on high incomes, cites studies
that say local taxes arc seventh o f
tw elve concerns when business
makes investment decisions.
Local governments want a stable
revenue source to replace the p o li
tically v o la tile p ro p e rty tax (b usi
ness’ second co n cern , B ornem an
says). Shaken by frequent voter re
jections o f property levies, and three
close calls on drastic tax lim itatio n
initiatives, local governments want
to sec "perm anent and predictable
p ro perty tax r e li e f . . .t o avoid the
passage o f a Measure 3-type propo
sal." according to a p re » release ex
plaining their tax plan
Sales tax supporters em phasize
their plans would also put limits on
spending and taxes in to the state
constitution. Critics say these limits
would lim it state and local govern
ments' flexibility to deal with future
growth and emergencies.
T h e L eg islature
A recent Eugene K e g a le r-G u ard
poll fo un d most state representa
tives in the " N o t N o w ," " M ig h t
S upport," and "Leaning Tow ards"
the sales tax categories. Opposition
is stronger in the state senate.
Despite a D em o cratic m a jo rity ,
and opposition from the state Dem
ocratic P a rty , there is p ro bably a
m ajority in the House willing to re
fer a sales tax to the voters. The tax
divides both p arties, w ith leading
supporters including Reps. C o u rt
ney and V era K a tz ( D -P o r tla n d ),
and opponents in c lu d in g W a lly
P riestley ( D -P o r tla n d ) and D ick
Springer (D -P o rtlan d ). W ith strong
lobbies on both sides, passing the
decision to a special election next
November may seem the easiest out.
Tho v o ters
Voters heavily rejected sales taxes
six times fro m 1933 to 1969. Polls
show most would now favor a sales
tax to offset property taxes, but the
m ajority has fallen from 37 percent
in favor to 37 percent against, last
July, to 32 percent to 44 percent in a
recent poll. Passage o f a tax will de
pend on how well the fairness and
relief issues are handles, and whe
ther the m edia b litz business and
government could put in to a cam
paign would overwhelm the volun
teer d oo r-to-door e ffo rt by oppon
ents.
Other tax proposals
Balaa ta x su p po rters
O rg an ized support fo r the sales
tax comes mostly from big business
and local government. Rick Borne-
man. spokesperson for the pro-busi
ness O reg o nian s fo r a B etter
Economy, says business' main con
cern is the state income tax, which is
the second highest in the country.
H e says executives are convinced
that the income tax is soaking up in
vestment funds, and keeping new
business out o f the state.
Bwrty Cstxn. P'oçngtor
Fvgtu.lng wig« by MAOMI SIMS. ANDAS DOUOLAS, BILUC » NATALIS COLS
Several alternatives to the sales
tax stand before the legislature.
Slate Rep. W ally Priestley favors
p ro p e rly tax re lie f by m eans o f a
"homestead exemption” on the first
313,000 o f assessed valu atio n . An
aide says this apporach w ould con
centrate re lie f on homes in the
S3O.OOO-S7O.OOO range, while taxes
w ou ld rise on homes above
3123.000.
Rep. H o s tic k a and Sen. H en-
dricksen w ant to cut income taxes
fo r 63 percent o f O regonians, in
clu din g most households m akin g
3 3 0 ,0 0 or less. Taxes fo r those
m akin g m ore w ou ld rise, as tax
brackets would widen from the pre
sent 4-10 percent range to 3-13 per
cent. Susan Sow ards, an aide to
Sen. Hendrickscn, says tax brackets
haven’t changed since 1963, and so
now with inflation nearly all taxpay
ers are in the 10 percent bracket be
fore deductions. She says the Hen-
dricksen-H osticka plan w ould ad
dress this im balance, and recover
some o f the Reagan tax cuts on the
w ealthy. Sowards says the income
tax plan isn’t necessarily opposed to
the sales tax.
Democratic leaders such as House
M ajo rity Leader G rattan Kerens (D -
Eugene) and Senate Revenue chair
Jack Ripper (D -N o rth Bend) favor a
stand-pat approach: cut 3240 m il
lio n fro m G o v . A tiy e h 's budget,
and don't change the tax structure.
Cuts would come mostly from state
workers' raises, a new prison, and
property tax relief. M ore cuts in tax
relief would risk passage o f a M ea
sure 3-type measure.
Most members o f the O USST co
a litio n support the H en d ricksen -
Hosticka and Priestley measures in
stead o f the sales tax.
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