Well, looking back on that era, we can see that all that didn't happen. What did happen is that revenues increased monumentally, the recession ended and the percentage of federal taxes paid for by the top 10% of income earners increased. Even Bill Clinton's Council of Economic Advisors said in 1994, "It is undeniable that the sharp reduction in taxes in the early 1980s was a strong impetus to economic growth."
Additionally, subsequent to the Bush and Clinton tax increases of 1990 and 1993, there was a reverse in the willingness of wealthy tax payers to expose their income to taxation, and the tax burden began to shift again. Now, why did the national deficit soar during this period if federal revenue was also up significantly? The same could be said for the last 4 years under Bush Jr. It's the spending. In fact the rise of spending, and thereby the deficit, put tremendous pressure on Bush and Clinton to raise taxes once again.
Forward now to the year 2001. The tech boom was finally on it's way down, after years of growth and upward movement. This wasn't unexpected, as many economists thought that the industry had too much fat or air or whatever you'd like to call it. The surprise was the events of 9/11. Whatever recession we were going to experience, this event magnified it and sent the economy, and Wall Street spiraling. Now while this wasn't anywhere near the devistation that the Great Depression proved to be, it was still disheartening.
However, contrary to the screams of Democrats all over the nation, Bush pushed hard for a series of tax cuts. Some of those advertised were designed to help working class families by eradicating the marriage penalty and increasing deductions for children. Not that it was any salve to the liberal sentiment. However, if you hadn't noticed, the economy is surging again, the DOW is hitting new heights, job growth over the last two years has been immense and we've already surpassed the job market of the pre-9/11 time period. Tax revenue is soaring as well, and the deficit (the annual deficit) has been cut in half over the last 3 years. Why hasn't it been eradicated, you ask? It's the spending.
Why am I going over all this ad-nausium? Well, because most of what you'll read in the opposition to ballot Measure 41 in Oregon this year sounds exactly the same as the complaints about all the federal tax cuts of the last 25 years.
There's very little that I have to say about the arguments in Favor for this measure, as they don't say much and what they do say I find hard to dispute. I'm not a tax activist, but I believe in smaller government and tax relief for All Americans and Oregonians (rich people included).
The text of this measure is short, but what you need to know about it is that it allows people to exchange the deduction on their taxes that they get for every exemption on thier taxes (which is about $160 per exemption) and replace it with a deduction against your income equal to that which you take on your federal taxes, which is about $3,200. Now not many of us will be able to figure out what the difference in taxes would be for us until we get all our forms for the next year and calculate all that out. However the Statement of Financial Impact and the Arguments in Favor tend to think there will be a definite tax reduction of about $140 per exemption.
Now the what I see over and over again is that
"More than 90% of the Oregon state general fund covers education, healthWell, that's not entirely true, as there are fees, property taxes and many others. But it's true that we don't want to raise those taxes to make up for the loss in other areas, right? In fact you won't see any discussion (on either side by the way) of predictions that the economy will improve enough to lift the tax revenues back up to current levels anyway, so this argument, countered by my history above, sounds pretty alarmist and hollow.
care, and public safety. If Measure 41 passes, it will mean deep and
immediate cuts to these services. There is no other place for the money
to come from."
Another complaint issued frequently is that the tax cut is "retroactive." Don't be confused by this. No one is going to see the benefit of this measure until they file their 2007 tax returns in 15 months or so. The problem for all these poor government folks is that they make budgets into the far future, which is not a bad thing. Planning 2 years in advance is prudent, but sticking to that plan as if it's hardwired into the system and can't be changed to account for changes in the tax base is unrealistic. Remember, the reason the economy is back on it's feet at all is because of the federal tax cuts, so roll with this punch and things might just be peachy come 2008.
This one caught me off guard.
Really? Seniors can't take a single exemption on their tax returns? Not even for themselves? Well, buck up. Perhaps Measure 44 will pass.
Most seniors will receive no benefit from Measure 41 – 98% of all low-income seniors will get no relief from the Measure. Instead, they may lose prescription drug coverage and access to
valuable programs like Oregon Project Independence that keep seniors in
I noticed that the opposition spends some time trying to convince you to vote no on the bill because of the people who wrote it and support it, like Bill Sizemore and Russ Walker. There's an argument here, as Sizemore probably isn't the most trusted person you'll find, and cheated a bit on past elections to try and get measures on the ballot. But I'm not voting for him, I'm evaluating the measure. I'm sure you all wouldn't want people evaluating a measure or bill just because the League of Women Voters or the ACLU was behind it, but on the substance of the measure itself. So this is just another scare tactic.
When it comes down to it, most Oregonian's have seen little or no increase in income over the past few years. That's changing, which is encouraging, but in that same period of time the state government grew by 7% each year on average for the last 15 years. The state should be able to support this. However, with increased growth in tax revenue, the natural response of legislators and bureaucrats is to find things to spend it on. Don't let people fool you, the state does NOT need to be as big as it is.
By the way, the change is voluntary on your tax forms, and you can still take the $160 off you tax payment instead of the federal deduction, so if you want to pay the extra, you sure can. Did the statements of financial impact take that into account?
My vote: YES
It looks like people really don't get what this bill is about. I don't think that it should be voted down just because people don't understand what the cut is about. Check this comment out.
Horus, by raising the exception to $3200 from $154, Oregon's taxThink about that. This person thinks that your taxes will be reduced by $3200 instead of $154, when both numbers represent reductions of two very different things. It's apples to oranges. If the above is what you thought this measure was doing, take some more time to really read the measure.
revenue will decline, drastically. It would be like simply giving all
Oregonians an acorss-the-board tax cut (but a sneaky way to do it) that
would drain the state coffers.
This person is against it, but there's some good thought there and in the comments.
Jack Bogdanski doesn't like it. "Measure 41 (tax deduction vs. credit) is preposterous -- let's start micromanaging the tax code at the ballot box." Sorry, Jack, I disagree. This isn't micro-managing, it's relief.