Any student concerned with rising tuition and plummeting financial aid can take one easy step to prevent things from getting worse: Vote yes on Measures 66 and 67. The measures, the only items on ballots arriving this week, would marginally raise taxes on wealthy individuals and corporations to keep $727 million in the state’s two-year budget.
The legislature passed the tax increases last year, and the revenue from them is already counted in the new state budget. If the measures fail, legislators will have to raise taxes somewhere else. Or, far more likely, legislators will make cuts to social services for senior citizens and the less fortunate, fund fewer public safety officers and raise tuition in the state’s universities.
Few people would actually end up paying the taxes. Measure 66 would tax individuals with taxable income of more than $125,000 or households with taxable income of $250,000 a year. That means 97 out of every 100 taxpayers in the state will not be affected.
Measure 67 is a bit more complicated. It won’t affect most small businesses that are sole-proprietorships. Other types of corporations will see an increase from a minimum of $10 to $150. C-corporations, which pay federal taxes under Subsection C of the Internal Revenue Code, currently pay a tax on their profits. Measure 67 would instead tax these corporations’ gross sales on a sliding scale up to $100,000.
The reason for taxing sales instead of profits is simple, though it’s not something the proponents of the measures like to say out loud: Big corporations can afford better accountants than most people, and it’s not so hard to make it look like they don’t have taxable income. Beyond this fact, the overall tax burden for businesses in Oregon is the third-lowest of any state, according to the Center for State and Local Taxation. If Measure 67 passes, the center says businesses here will have the fifth-lowest tax burden of any state.
A 2008 study from the auditing firm Ernst & Young found Oregon’s businesses have the second-lowest tax rate in the nation, because the largest burdens on businesses are property and sales taxes — corporate income tax is a distant third. Because Oregon doesn’t have a sales tax, and property and corporate income taxes are relatively low, businesses do pretty well here.
Chances are good most college students do not own c-corporations or make more than $125,000 a year. Even if they did, they might care about the health of the state, where classrooms are underfunded and workers are underemployed.
Most school districts around the state made drastic cuts this year so they would not have to rely on tax increases that may never pass. Classes are crowded and teachers have been laid off. One school district in southern Oregon is down to a four-day school week. Our state will not return to prosperity any quicker if we can only keep children in school part-time.
Students would also suffer beyond K-12 education. Community colleges, always the awkward middle child of the state’s education system, would likely see the biggest cuts to classes and the largest tuition increases. Anyone who cares about greater access to higher education has to acknowledge that many cannot afford four years at a university; community colleges bridge a gap that allows many struggling people a chance at equal opportunity.
Opponents of the measures say they don’t want any of these services to be cut. They say they would rather state workers take cuts in pay and health benefits. At the University, it is quite clear employees have already taken pay cuts — they are called furlough days.
Classified staff members here have seen freezes in pay increases and unpaid mandatory time off. When classified staff are forced to stay home from work, students face an understaffed campus.
Even with these measures, tuition will continue to rise more than some can afford and financial aid will lag behind need. But in a down economy, these measures are necessary to prevent a bad situation from getting worse. Three out of 100 taxpayers and a few corporations can afford an increase in taxes — at least a lot more than the state can afford to lose the revenue.
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Emerald endorses Measures 66, 67
Daily Emerald
January 11, 2010
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