About the only accomplishment of the Reagan administration was the indexing of incomes that came with the grandiose tax cuts. This helped ensure that those earning the least amount of money from wages would be taxed at the lowest rates. This oversight was not repeated very often by legislators. While federal tax brackets and both personal and standard deductions rose to reflect purchasing power the maximum credit for the child care credit has remained steady for over a decade - and more importantly ALL the state brackets and deductions have also remained steady. The effect has been that those in Oregon earning the least amount of money have steadily higher portions of their income taxed at the highest marginal tax rates. The overwhelming majority of local tax relief provided to Oregonians since Reagan took office has gone to those with the highest income. Ironically, shortly after the HARRP program, which provided crucial tax relief to low income homeowners was gutted by inflation [17.5k of income used to buy a lot more in the early days of the program], Sizemore and company exploited the misery of those homeowners who previously benefitted in order to pass his counterproductive measure 5. Of course, this tax limitation measure resulted raising real estate prices to the result that Oregon is not far behind California in cost of housing - and the lack of affordable housing for most working Oregonians. It doesn’t take an economics genius to figure out the obvious: property tax limits>higher prices=windfall to real estate developers/large property owners+ shortage of affordable housing.
My income tax relief proposal is very simple. I would triple the present tax rates and multiply the standard deductions by 2.5 and tie the personal deductions to half the federal deduction. Simply put: a single wage earner would deduct 4500 for standard deduction + 1375 for his one personal deduction and pay 5% on the first 6,000 of income + 7% on the next 9,000 of income + 9% of any income over 15,000. You would double the tax brackets for married, head of household, or widowed filing as married. I would also triple the maximum federal tax deduction allowed to 9000 for married couples/4500 for singles - although the goal of my reform is retroactive indexing, I would support a plan to eliminate this cap [if it would give the relief to working Oregonians that I’ve outlined above]. I would keep all the other features intact - except for a seperate proposal to raise the eligible amounts for political contributions, child care, and any other benefits whose amount or eligibility has failed to keep up with reality.
I haven’t seen the latest tables for HARRP; I plan on requesting that from the state before this summer, but I would like to reinstate this program raising the eligibility to at least 52,500 and at least double the amounts to be refunded. If this program were indexed like our federal taxes were, it would have provided more relief to deserving Oregonians - without the resultant skyrocketing prices that have removed the dream of home ownership from too many working families. I will establish a link to this page with any further updates.
As I stated earlier, don’t count of this plan being coopted by the GOP - or the me too Democratic party either, for that matter!
2/24/97
