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Taco John
01-27-2010, 11:28 AM
Oregon voters raise taxes on wealthy, businesses

Oregon voters Tuesday approved Measures 66 and 67 that would raise taxes on the wealthy and on businesses. The vote suggests Americans may be willing to accept some types of tax hikes even in these hard times.

Voters in Oregon have sent a signal: Some tax hikes can win popular support even amid a deep economic downturn.

Ballot counting Wednesday showed that, by a roughly 54-to-46 margin, Oregonians supported two measures, one raising income taxes on top brackets and the other raising taxes on business.

The outcome on Measures 66 and 67 doesn't mean that Americans generally are in a mood to raise taxes. But it could signal acceptance of at least one tax boost supported on the national level by President Obama higher levies on people earning more than $125,000 (or $250,000 for households).

Many states, and the federal government, are facing budget squeezes in the wake of a recession that has pushed up demand for unemployment insurance and other programs while also eroding the stream of tax revenue.

Oregon is a state where voters have often struck down tax hikes in the past, but also one that generally tilts Democratic. It also offered a rare window on public opinion, since it was voters themselves who approved the hike. In some other states, legislatures have opted for similar measures in the past year.

The fiercely fought contest pitted one compelling message "stop job-killing taxes" against another that state residents would see big cuts in government services if the $727 million two-year taxes were defeated.

"Our 'yes' vote says that Oregonians will stand up and protect the foundations of our community our schools, our health and human services, our public safety system," said Charles Sheketoff, executive director of the Oregon Center for Public Policy, following Tuesday's referendum. "Oregon voters showed the country how to put a state on a sound fiscal path to recovery."

But critics warn that the policy will hurt job growth.

People making more than $125,000 aren't necessarily synonymous with "the rich." Many are entrepreneurs or small business owners people who aren't necessarily wealthy but who create jobs. Now they could move out of state or be reluctant to move in.

Oregon's vote comes as many states are confronting an unusually difficult budget outlook. Most faced balance-budget requirements, and are struggling to close gaps as a new fiscal year looms. Already, in the fiscal year now under way, Illinois, Arizona, and Nevada faced gaps greater than a third of their general funds, according to research cited by the Pew Center on the States last fall.

And at the federal level, budget deficits have soared. Obama, eying a surprise senate-race loss for Democrats in Massachusetts, has been struggling over the past week to reframe his economic policies.

His challenge is partly a tug-of-war between two priorities: to spend now to stimulate job growth, and to get the fiscal house in order so that rising government debt doesn't become a drag on the economy.

He has called for a spending freeze on part of the federal budget. But on Monday he also proposed expanded programs to support middle-class families.

Many budget analysts say that at some point, the nation will need to take stronger measures to tame federal deficits, including both new revenue and spending restraint. Obama's tax policy so far has mirrored that adopted by Oregon Democrats who backed Measure 66: Support higher taxes on top earners but not on most taxpayers.

Rising healthcare costs, however, make it hard for a tax-the-rich approach alone to fully close expected federal-budget gaps.

http://www.csmonitor.com/USA/2010/0127/Oregon-voters-raise-taxes-on-wealthy-businesses

BIG_DADDY
01-27-2010, 11:32 AM
Fuck Portland and Eugene

Taco John
01-27-2010, 11:32 AM
I know two business owners in Oregon that said, "It can't be helped - if they pass this tax, I've got to let workers go and get more streamlined." We're talking about high paying marketing jobs here. And do you think those people being laid off in that market are going to want to start their own marketing businesses in Portland? Hell no. They're leaving towards Washington, and trying to find business from remote offices.

Mile High Mania
01-27-2010, 11:46 AM
Higher taxes on individuals making more than $125k and households over $250k?

That's just insane... I would love to know how many people in those earnings groups actually voted for it. That's just stupid.

The stop the wealthy mantra is old...

BIG_DADDY
01-27-2010, 11:54 AM
I know two business owners in Oregon that said, "It can't be helped - if they pass this tax, I've got to let workers go and get more streamlined." We're talking about high paying marketing jobs here. And do you think those people being laid off in that market are going to want to start their own marketing businesses in Portland? Hell no. They're leaving towards Washington, and trying to find business from remote offices.

After 70 years we will most likely shut down our family business in Medford. It's very real.

fan4ever
01-27-2010, 12:03 PM
I was in Oregon about 3 years ago...needed gas and got out to pump it. A lady from inside comes running out "Oh no you don't" and grabbed the handle away from me. "You must be from out of state" she said as she pumped my gas. I thought maybe I pulled into a full service station, but no. Gas was really expensive up there too.

When my wife and I visited her aunt and uncle I asked them about the "no pumping yourself" deal. They said that protecting the White Spotted Owl put thousands of people out of work, from the guys who cut down the trees to the people driving the trucks to the people working in the saw mills. The solution? To let these people pump gas, with their salaries being paid for by a sur-tax on the gasoline. Of course all the people left the state or took other jobs rather than pumping gas...so now little flunkies do it and get paid less than the salary proposed for the laid-off workers...so the state gets that extra coin from the sur-tax. At least that's how it was told to me.

Oregon seems to have more than it's share of tree-hugging liberals.

jiveturkey
01-27-2010, 12:46 PM
I don't support this increase (which doesn't matter anyway because I don't live there) but I want to play devils advocate here.

You're taxed on your net income, not your revenue (at least that's how it works in KS). Laying off workers because of a tax increase would increase your taxable income, would it not? I would think that the increase in taxable income would outweigh the tax increase. Am I missing where it says what the amount of the increase is?

This argument only applies to business owners. If you're just a guy making $150k you're screwed either way.

KC native
01-27-2010, 01:13 PM
I don't support this increase (which doesn't matter anyway because I don't live there) but I want to play devils advocate here.

You're taxed on your net income, not your revenue (at least that's how it works in KS). Laying off workers because of a tax increase would increase your taxable income, would it not? I would think that the increase in taxable income would outweigh the tax increase. Am I missing where it says what the amount of the increase is?

This argument only applies to business owners. If you're just a guy making $150k you're screwed either way.

All things other than the tax being equal, yes, but you won't see that type of analysis from the simpletons out here.

Taco John
01-27-2010, 01:21 PM
I don't support this increase (which doesn't matter anyway because I don't live there) but I want to play devils advocate here.

You're taxed on your net income, not your revenue (at least that's how it works in KS). Laying off workers because of a tax increase would increase your taxable income, would it not? I would think that the increase in taxable income would outweigh the tax increase. Am I missing where it says what the amount of the increase is?

This argument only applies to business owners. If you're just a guy making $150k you're screwed either way.


Those guys know their business more than I do. It's pretty easy to get theoretical about how other people's books run. But if you're a solid business owner, and depending on how you pay yourself, there's a solid chance that you're going to get double-dipped by this law. If you're getting double dipped, today is a black day as you sit and consider the shock you've just received to your economic system.

jiveturkey
01-27-2010, 01:27 PM
Those guys know their business more than I do. It's pretty easy to get theoretical about how other people's books run. But if you're a solid business owner, and depending on how you pay yourself, there's a solid chance that you're going to get double-dipped by this law. If you're getting double dipped, today is a black day as you sit and consider the shock you've just received to your economic system.I guess it really depends on how they're structured. I've been set up as an S-Corp for close to 5 years now and I don't see how it's possible to get "double-dipped".

I'm sure that these people are smart enough to sit down with an account and plan out the next couple of years with the new tax in place. I'm still pretty sure that they'll find little benefit from laying off any marketing types. Even if you have to trim the payroll you don't want to trim your business development team. Outsourcing bookkeeping or some other area would make more sense.

petegz28
01-27-2010, 01:33 PM
I don't support this increase (which doesn't matter anyway because I don't live there) but I want to play devils advocate here.

You're taxed on your net income, not your revenue (at least that's how it works in KS). Laying off workers because of a tax increase would increase your taxable income, would it not? I would think that the increase in taxable income would outweigh the tax increase. Am I missing where it says what the amount of the increase is?

This argument only applies to business owners. If you're just a guy making $150k you're screwed either way.

If your taxes go up as a business you have three choices to absorb the additional costs:

A) Raise prices
B) Keep current prices and layoff workers
C) Eat the costs

jiveturkey
01-27-2010, 01:45 PM
If your taxes go up as a business you have three choices to absorb the additional costs:

A) Raise prices
B) Keep current prices and layoff workers
C) Eat the costs
That's a pretty basic way of looking at it.

Raising your prices will lead to more taxable income and thus more taxes.

Laying off workers is also going to increase your taxable income.

Eating it is hard to avoid.

You really need to find another way to decrease your taxable income. It might be possible to actually lower prices and make the tax change a wash.

Either way it can be a lot more complicated that we're making it out to be. Again you have to look at the type of corporation and how their structure and if they're making the most of the deductions as a business now.

Taco John
01-27-2010, 01:47 PM
Every situation will be unique depending on how their books are currently running. It's not like this law is being applied in a vaccuum. These businesses are all fighting for their business lives right now. Each of them will have to apply this law to their own books, and make decisions based on what kind of business they are/aren't generating. But at the end of the day, JT is right that business owners in Oregon are now incentivized to minimize their taxable income. Each of them will find their own unique solutions to do that. Probably it will be a combination of raising prices, and laying off workers, while minimizing as much as possible the costs that they have to eat.

I think that anyone can agree that they wouldn't want to be unemployed and living in Oregon right now.

FishingRod
01-27-2010, 02:12 PM
Most people are in favor of raising the taxes on other people.

KC native
01-27-2010, 02:19 PM
Those guys know their business more than I do. It's pretty easy to get theoretical about how other people's books run. But if you're a solid business owner, and depending on how you pay yourself, there's a solid chance that you're going to get double-dipped by this law. If you're getting double dipped, today is a black day as you sit and consider the shock you've just received to your economic system.

ROFL You don't know what you're talking about. This is responding to you later post to. Accounting is accounting. There are some grey areas but as far as tax accounting goes it's pretty simple provided you know the tax laws.

How are they going to get double dipped?

Cannibal
01-27-2010, 02:26 PM
I guess they can ship the jobs to China and find some more slaves like everyone else.

petegz28
01-27-2010, 02:30 PM
That's a pretty basic way of looking at it.

Raising your prices will lead to more taxable income and thus more taxes.

Laying off workers is also going to increase your taxable income.

Eating it is hard to avoid.

You really need to find another way to decrease your taxable income. It might be possible to actually lower prices and make the tax change a wash.

Either way it can be a lot more complicated that we're making it out to be. Again you have to look at the type of corporation and how their structure and if they're making the most of the deductions as a business now.

If lowering prices was effective every company would be cutting prices like crazy. We have the 2nd highest corporate tax rate in the world.

Joe Seahawk
01-27-2010, 02:45 PM
Too many smokers= tax the smokers
Too many drinkers = tax the drinkers
Too many jobs = tax the employers?

FishingRod
01-27-2010, 03:17 PM
Too many smokers= tax the smokers
Too many drinkers = tax the drinkers
Too many jobs = tax the employers?

Slight modification but I follow your logic.

More non smokers than smokers = tax the smokers
More non drinkers than drinkers = tax the drinkers
...? = tax the employers?


To be fair the few people I know from Oregon are about as sharp as a pound of wet liver.

BucEyedPea
01-27-2010, 05:14 PM
Most people are in favor of raising the taxes on other people.

Exactly!

Hydrae
01-27-2010, 05:23 PM
I was born there and also graduated high school in Oregon. Beautiful country for sure. I am so glad I left before they went off the deep end of socialism though.

fan4ever
01-27-2010, 07:13 PM
Exactly!

Saying: Any plan that robs Peter to pay Paul will always have Paul's support.

BIG_DADDY
01-27-2010, 07:38 PM
All things other than the tax being equal, yes, but you won't see that type of analysis from the simpletons out here.

Because you have run how many companies? My family business may be lost in this mess in Medford Oregon. Do those of us a favor that this effects and just STFU

DJ's left nut
01-27-2010, 08:11 PM
All things other than the tax being equal, yes, but you won't see that type of analysis from the simpletons out here.

That's because those simpletons recognize the disengenous nature of your qualifier.

All things other than the tax will not remain equal.

The answer is that laying off workers would offset the tax increase, just as Jiveturkey suggested. It would also decrease productivity, increase worker strain and otherwise adversely impact the standard of living of the working class all in the name of preserving wasteful government programs.

You can't just keep cutting your labor staff, sooner or later you get through the fat and hit bone. In a trying economic environment, the fat's already burned off. If you can't figure out how this would greatly harm small business (not to mention those laid off to 'offset' your tax burden), I'd strongly suggest you lay off throwing 'simpleton' around.

banyon
01-27-2010, 08:48 PM
State taxes = Job losses!

It's just that simple.

So, lowest taxes = most jobs, right?

Everyone, Mississippi has the best per capita income and job market in the United States! Get on the Mississippi fun bus!

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Toadkiller
01-27-2010, 08:59 PM
Hey Big Daddy I am curious on how much your taxes go up due to these measures passing. As I get older I am getting to hate taxes of any kind, especially unfair taxes. Can you expound on what sort of business you are in, approximately how much your taxes are going up etc.

Just for the record I voted no on both, and I am one of those tree hugging hippy wannabees.