SENATE  BILL  30
GOING  AGAINST  THE  GRAIN 

This bill would lift the tax burden on the people tax relief usually bypasses: the guy, gal or family well below the poverty line, whom Oregon taxes, we have read, more severely than most states. So here is a tax relief that can make a difference in ordinary lives.

SB 30’s proposed tax code changes would not create huge changes for our poorest working families, but then, they don’t have huge incomes or huge taxes in the first place. We’ve crunched some numbers and the bill does appear to cut taxes a bit for the poorest among us. For taxpayers earning less the $5,000, we have not reached any numbers, preferring to let those better versed in tax law deal with the question of what is a person’s “taxable income” at that low level. But we can say that for a taxpayer earning $6,000 this bill would drop his tax from $390 to $314. For one earning $7,000, it would go from $490 to $384. For one earning $10,000, from $760 to $594. And for one earning $15,000, from $1,210 to $980.

These are not big sums, but when you are that poor, every nickel helps. We are already seeing inflation creep up on us, even by Commerce Department standards. (Amazing how that department reports “core inflation” as excluding food and energy costs - the two going up the fastest!) Inflation is here, and our large and growing national deficit ensures it will worsen; and most salaries we know of are not keeping up. A little tax relief for our most vulnerable taxpayers seems warranted. 

As long we’re on the subject - how about a minimum alternative tax for corporations so PGE never again can pay $10 income tax, as it did one recent tax year. If such an alternative minimum, at say, $1,000 ends up affecting, say, 1,000 companies with clever accountants, it would raise $1 million. That’s not a lot in terms of Oregon’s budget deficit, but it would help. And (at $1,000 per corporation) it would not be enough to prompt one company to move one factory, office or job from Oregon. But it could balance SB 30 and make it all more-or-less revenue neutral. Such an additional bill or added provisions should include a clause requiring that the alternative minimum be revisited every ten years, to make sure bracket creep due to inflation does not do to this what inflation has done to the federal alternative minimum tax (i.e., make it apply more and more to taxpayers with less and less.)  

We could thereby craft tax relief for the poorest taxpayers, end the outrage of billion-dollar companies paying virtually no income tax, lose no jobs in the process, and avoid the unintended consequences of the federal alternative minimum tax. Is that too much to ask?

The legislature, The Oregonian recently reported, is seeking ways to recover legitimacy for the state. This is how to do it. 

Ed Johnston 541-336-1233