Measure for measure
With just over three weeks to go until the ballots are counted, it's time to get serious about looking at the ballot measures that will be before us Oregonians momentarily. There are a dozen of these, and with the ballots ready to hit the mailbox, we'd better cover them at a clip of at least two a day.
We've already mentioned Measure 59 on this blog; it would change the Oregon income tax law to allow an unlimited deduction on one's Oregon income tax return for federal income taxes incurred in the same year. Let's roll that one in with the other tax measure, No. 56, largely eliminating the "double majority" rule, into a single post to kick things off. Both measures involve taxes, and both are reruns of past initiative battles.
Measure 59, the unlimited state income tax deduction for federal taxes, has been voted down in the past (most recently in 2000, I believe), largely on the ground that it's a tax cut for the rich. I'm not sure that's a fair characterization. As a practical matter, it represents a state income tax cut for Oregonians who pay more than $5,600 in federal income taxes in any given year. Are they all what you would call rich?
According to my algebra, to owe more than $5,600 in federal tax, a married couple would need to have federal taxable income of more than $42,683; a single taxpayer would need federal taxable income above $37,025. If you factor in the standard deduction and personal exemptions (with no dependents), a married couple would need total income of more than $60,583 to benefit from Measure 59; and a single taxpayer would need total income of more than $45,975.
I don't know about you, but I don't call a couple making $61,000 or a single person making $46,000 rich. (I tend to agree with Obama, who draws that line at $250,000.) Granted, Measure 59 would give a cut to everyone at the $61,000 level and above, including the truly well-to-do among us. But at least to some extent, it's a middle-class cut.
Perhaps the greatest attraction of this measure is its theoretical purity. As I've written here before:
You can't pay taxes to the state out of the money taken from you by the federal government. Failure to allow full deductibility amounts to a state tax on a federal tax....If Measure 59 passes, the state legislature will no doubt have to make up the revenue by imposing higher tax rates than it currently does on high-income taxpayers. Instead of a top marginal rate of 9 percent, they'll probably have to have a top marginal rate of, say, 12 percent. But it would be a 12 percent tax on an honest tax base -- not 9 percent on a dishonest tax base, which includes money that the feds take away before we get to see it in our take-home pay.
Passage of Measure 59 might also trigger a serious discussion of Oregon's tax system -- essentially a flat-rate, high-rate income tax, with no general sales tax -- which wouldn't be a bad thing, in my view. I know, I know -- the bad guys put it on the ballot, it went down before, and it benefits the wealthy, but I'm inclined to vote for it as a middle-class tax cut and a blow for honesty in taxation.
That brings us to Measure 56, which would eliminate the "double majority" requirement currently contained in the state constitution for ballot measures that would raise property taxes. Under current law, in order to pass a property tax increase, a measure must gather a majority of the votes cast, and a majority of the registered voters who are eligible to vote most vote in the election. The only exception is for November elections in even-numbered years, when members of Congress are elected (and every fourth year, of course, the President). As I recall, this requirement has been on the books for 12 years.
The double majority rule, which Measure 56 would get rid of, does lead to some anomalies. The one that's most often pointed to is the fact that people too lazy to vote get to cancel out the votes of those who show up and vote to increase taxes. But here's another one, even crazier: By voting "no" on a tax increase, you're actually helping to pass it, because you help the turnout exceed 50 percent. If you didn't vote at all, you wouldn't be adding to the turnout numbers. And so if you really want to help defeat a tax increase, you must first determine whether a majority of eligible voters are going to show up. If you're confident they are, then you should vote "no." But if you think the turnout might miss the 50 percent mark, then the best thing to do is not vote. Crazy, and possibly unlawful (if anyone would bother to challenge it on these grounds in court).
Anyway, Measure 56 would get rid of the double majority rule for any election in May or November in any year. Under current law, property tax increase measures can be passed without the double majority only in November every other year.
It's a close call, but on balance I like having all the property tax increase elections held at once. Under the old system, we used to get bombarded with the bureaucrats' requests for money several times a year, which both hid the combined impact of the tax boosts and allowed them to pass in low-interest elections in which only the government union people showed up. The world hasn't ended under the double majority requirement, and the more I see governments like the City of Portland squander tax dollars on developer and construction company welfare, the less inclined I am to support their revenue-raising initiatives. I'm inclined to vote no on Measure 56.