TUESDAY, JUNE 1, 2021
Baker City, Oregon
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OUR VIEW
State’s
coffers
bulge, but
it wants
even more
The state of Oregon’s revenue picture is nothing
short of stunning. It could be bulging with $1.8 billion
more in its two-year budget than it had expected in
February. Income taxes surged.
The state budget picture was already looking a
rosy shade of rosy before the most recent budget
projection. The $2.6 billion from the American Rescue
Plan Act was going to fi ll what had been anticipated
to be a $1.3 billion budget gap.
Then, last week, in the Senate Committee on
Finance and Revenue, a proposed amendment was
dropped that was no less stunning. It aimed to grab
more revenue. From businesses. When Congress did
not intend the money to be taxed.
Which legislator or legislators proposed is not
disclosed on the amendment. That is not stunning.
It’s an all too common practice of legislative secrecy,
preventing voters from being able to hold legislators
accountable.
The amendment proposes to tax forgiven Paycheck
Protection Act loans. The amendment would exempt
the fi rst $100,000 in loan forgiveness. Full disclosure:
The Bulletin benefi tted from a PPP loan.
Remember, Congress passed the PPP to help
businesses in desperate pandemic times. It helped
prevent the country from dipping into a horrible
recession. And despite that help, many businesses
still went under. Many employees were let go. Now
the state of Oregon plans to go after those dollars
even when the state budget is bulging with billions?
Congress did not intend that the PPP loans would be
taxed as income when they were used as intended.
The money is not needed by the state. Do legislators
need more reason than that to let the amendment
die?
Unsigned editorials are the opinion of the Baker City Herald.
Columns, letters and cartoons on this page express the opinions
of the authors and not necessarily that of the Baker City Herald.
Biden tax hike plan irresponsible
By Tracy C. Miller
The Biden administration proposes
increasing taxes on high-income indi-
viduals and businesses. In light of enor-
mous government debt, one could be
forgiven for seeing it as a step toward
fi scal responsibility. However, it’s not.
Let’s start with the fact that it’s not
nearly enough money to cover the in-
creases in spending the administration
has been eyeing. The White House esti-
mates it will take 15 years of increased
corporate taxes to cover eight years of
spending from its proposed infrastruc-
ture package, the American Jobs Plan.
Meanwhile, revenue from the proposed
tax increase on high earners and their
pass-through businesses will be enough
to cover just over one-third of the $1.8
trillion in social spending that would
come with the American Families Plan.
Faced with the choice, it may be more
fi scally responsible to cut taxes than
to increase them. As Milton Friedman
said, “Governments spend whatever
they take in, and then whatever they
can get away with.” So if they take in
less, they can be expected to spend less.
Yes, there have been periods when
the U.S. government has cut taxes and
increased spending (or raised taxes and
cut spending). Nevertheless, this prin-
ciple applies in the long run. Countries
with high spending — think Scandina-
via — have relatively high taxes, while
those that spend a smaller share of
national income have lower taxes.
The argument for reducing taxes
starts with the premise that govern-
ment spending is too high, in spite of
politicians’ endless efforts to win voters’
support by spending more. Regardless
of how it is fi nanced — and of popular
political sentiment — government
spending is less effective than money
spent privately on goods or services.
When a private fi rm produces a good or
service, market prices and competition
give it an incentive to meet consumer
needs at the lowest cost.
Higher tax rates reduce incentives to
do whatever it is that is taxed. Income
taxes reduce the incentive to work,
taxes on profi ts reduce the incentive
to invest, and sales taxes reduce the
incentive to buy and sell. That’s why
taxpayers lose more than a dollar
for every dollar collected. If the costs
of collecting and enforcing taxes are
included, the loss is even larger. For
all these reasons, it is even possible to
increase taxes to the point where you
wind up with less tax revenue.
Government spending is needed to
pay for some things, such as national
defense and transfer programs like
Medicaid and food stamps. But Presi-
dent Joe Biden is proposing to spend on
electric vehicles and charging stations,
research and development, childcare,
and other things that could be bet-
ter provided by the private sector. We
should be looking for ways to free up
more resources for private production,
rather than crowding it out with inef-
fi cient bureaucracy.
There are a few objections to “starv-
ing the beast” to force spending cuts.
One is that a history of large defi cits
may increase politicians’ and the
public’s tolerance for debt. Another
is that it may make it harder for the
government to pay for what seniors
have come to expect from Medicare and
Social Security.
The current generation of workers
pays Social Security and Medicare
taxes every year, so they are entitled to
a decent return on what they have paid
in. But government is not collecting
enough in Social Security and Medi-
care taxes to pay all scheduled benefi ts,
and the shortfall is increasing over
time. Given the enormous size of the
debt and its continued growth, the ris-
ing share of the budget needed to cover
interest costs, and demographic trends,
this can’t go on forever.
Unfortunately, increasing taxes this
year probably would not have much
effect on the government’s ability to
pay future Social Security or Medicare
benefi ts. It would be better to elimi-
nate shortfalls by combining reforms
with tax increases targeted specifi cally
toward paying retirees.
Biden would not be the fi rst presi-
dent to band with Congress and spend
without considering how much we’ll
need to borrow, but his plans to in-
crease taxes are not much better. They
could prolong the government’s ability
and willingness to spend excessively.
There is a point at which private inves-
tors and foreign governments will no
longer be willing to buy all the debt
the Treasury issues — the question is
when.
If Congress reduced taxes, it could
hasten the time when the federal
government substantially limits discre-
tionary spending. If so, we could look
forward to a freer, more prosperous
economy and a smaller government.
Tracy C. Miller is a senior policy research
editor with the Mercatus Center at George
Mason University.
OTHER VIEWS
Your views
Finding the source of the pandemic
Questioning legality of a locked gate
Editorial from New York Daily News:
We don’t yet know where the virus
that causes COVID-19, the disease that’s
killed nearly 600,000 Americans and 3.5
million globally, came from. SARS-CoV-2
may well have crossed over from a wild
animal in an unsanitary wet market in
or around Wuhan, China. Or it may have
emerged from a lab in that city of 11 mil-
lion where scientists were studying bat
coronaviruses.
The latter hypothesis, angrily rejected
by Beijing, has in recent months begun
to gain credence. That doesn’t mean it’s
likely, but it does mean it warrants further
scrutiny, because a simmering theory left
unexamined will burn the pot. President
Joe Biden should therefore be commended
for ordering from U.S. intelligence agen-
cies what we hope will prove to be a defi ni-
tive review of the evidence for and against
the “lab-leak” origin story.
The debate has been fraught from the
start, perhaps because it has been irre-
sponsibly confl ated with the claim that the
bug was somehow deliberately engineered
in the Wuhan Institute of Virology. That
didn’t happen — but there is a possibil-
ity that an accident at the lab led to the es-
cape of a virus researchers were studying.
Among the dots connected by respon-
sible reporters, offi cials and scientists:
In July, the Times of London reported
that a virus 96% identical to SARS-CoV-2
was found in an abandoned Chinese cop-
per mine in 2012. It sickened six men and
killed three who had entered to clean out
bat guano.
In 2018, State Department investiga-
tors visited the WIV and sent two offi cial
warnings to Washington about inad-
equate safety controls there.
Thickening the plot, The Wall Street
Journal reported that a U.S. intel report
asserts that in early November 2019,
three WIV researchers working on
coronaviruses were hospitalized with
symptoms similar to COVID-19.
Meanwhile, scientists studying the
structure of the virus have found other
features of the virus consistent with pos-
sible laboratory origins.
Finding the truth about COVID-19’s
origins could inject real tensions into
the global war on this pathogen. But the
truth must be found.
CONTACT YOUR PUBLIC OFFICIALS
President Joe Biden: The White House, 1600 Pennsylvania Ave.,
Washington, D.C. 20500; 202-456-1111; to send comments, go to www.
whitehouse.gov.
U.S. Sen. Jeff Merkley: D.C. offi ce: 313 Hart Senate Offi ce
Building, U.S. Senate, Washington, D.C., 20510; 202-224-3753; fax
202-228-3997. Portland offi ce: One World Trade Center, 121 S.W.
Salmon St. Suite 1250, Portland, OR 97204; 503-326-3386; fax 503-
326-2900. Baker City offi ce, 1705 Main St., Suite 504, 541-278-1129;
merkley.senate.gov.
U.S. Sen. Ron Wyden: D.C. offi ce: 221 Dirksen Senate Offi ce
Building, Washington, D.C., 20510; 202-224-5244; fax 202-228-2717. La
Grande offi ce: 105 Fir St., No. 210, La Grande, OR 97850; 541-962-7691;
fax, 541-963-0885; wyden.senate.gov.
U.S. Rep. Cliff Bentz (2nd District): D.C. offi ce: 2182 Rayburn
Offi ce Building, Washington, D.C., 20515, 202-225-6730; fax 202-225-
5774. La Grande offi ce: 1211 Washington Ave., La Grande, OR 97850;
541-624-2400, fax, 541-624-2402; walden.house.gov.
Oregon Gov. Kate Brown: 254 State Capitol, Salem, OR 97310;
503-378-3111; www.governor.oregon.gov.
State Sen. Lynn Findley (R-Ontario): Salem offi ce: 900 Court St.
N.E., S-403, Salem, OR 97301; 503-986-1730. Email: Sen.LynnFindley@
oregonlegislature.gov
State Rep. Mark Owens (R-Crane): Salem offi ce: 900 Court St.
N.E., H-475, Salem, OR 97301; 503-986-1460. Email: Rep.MarkOwens@
oregonlegislature.gov
I have tried to keep informed on the progress
of the locked gate installed on Pine Creek Road. I
do not know Mr. McCarty personally, only what I
have read in the Herald and a few of locals opin-
ions. I have lived in Baker City all my life, which
by the way is a considerable amount of years, and
the locked gate he presumes is his right, is not a
right at all. His idea that the 2 1/2-mile distance
Pine Creek Road runs across his property is OK.
We have a law in Oregon called RS 2477, Ease-
ments By Prescription. Under Oregon law, a
claimant or claimants may establish an easement
by prescription by showing that his use of the
property over which he claims the easement has
been open, notorious, and adverse to the rights of
the true landowner for a continuous and uninter-
rupted period of 10 years. It is true RS 2477 was
repealed in 1976 under the FLPMA. That repeal
was subject to existing rights. The relevant text
(Sec. 701. 43 U.S.C. 1701 reads (a) “Nothing in this
Act, or any amendment made by this Act, shall be
construed as termination and valid lease, permit,
patent, right-of way, or other land use right or
authorization existing on the date of approval of
this Act.” I personally have not been to Pine Creek
Reservoir in years, the last time riding in on my
horse. But I do know many people still love to go
there via 4-wheelers, side-by-sides, horses, hik-
ers, and a really good 4-wheel drive. So I ask you,
Mr. McCarty and Joelleen, tell us why you think
installing a locked gate on Pine Creek Road is your
God-given right?
Glenda Purvine
Baker City