In January, while right-wing pundits were crowing about Scott Brown’s victory in Massachusetts, voters in Oregon sent a different message to the nation: Tax the rich.
Oregon is dealing with one of the largest budget shortfalls in its history—$4.4 billion. It’s a familiar story, occurring in state after state: As the ranks of the unemployed rise, income taxes decline; as foreclosures mount, property taxes plummet. During the last 35 years state governments have cut taxes on corporations and the wealthy, and put the majority of the tax burden on the middle and working classes. Now most states find huge holes in their budgets.
States are required by law to balance their budgets. In Oregon last year, the state legislature decided that the large shortfall should not be filled entirely by budget cuts that would further endanger the state’s most vulnerable residents.
They decided to raise $727 million, around one-sixth of the shortfall, through increasing taxes on some of the wealthiest Oregonians and corporations operating in the state. Originally big business was at the table, helping the Democratic-run legislature craft new tax proposals. But then the corporate lobbyists demanded a temporary tax proposal that would have put more of the burden on small businesses rather than large corporations, and would have raised taxes on all Oregonians rather than just the top 3 percent.
Legislators held their ground and passed HB 2649 and HB 3405. HB 2649 slightly raises taxes on the top 3 percent of earners in Oregon and exempts 270,000 unemployed Oregonians from taxes on some unemployment benefits. HB 3405 increases the corporate minimum tax in Oregon, which has been on the books since 1931, from $10 to $150, and slightly raises tax rates on upper-level profits.