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Tuesday, March 5, 2013

In Portland, gifts are now income for tax purposes

Now, that's just crazy, but sure enough, here it is:

A. "Income" includes, but is not limited to, all income earned or received from any source, regardless of whether it is taxable under state or federal law. Examples of income include, but are not limited to, gifts, interest from individual or joint savings accounts or other interest bearing accounts, child support payments, alimony, unemployment assistance, disability income, sales of stocks and other property (even if sold at a loss), dividends, social security income (taxable or non-taxable), gross receipts from a business and wages as an employee.

Notice, too, that gross receipts from sales are "income," even if the sale is at a loss. What about welfare?

Is that what the voters voted for? And who's writing this stuff -- the chimps in the zoo?

Oh, well. The definition of income probably isn't all that important, because we all know the new Portland arts tax isn't really an income tax. It's a head tax. Which is why it's illegal.

Comments (25)

If they want to avoid giving off the impression that it's a head tax, they should make it *easier* for people to get under the limit, not harder.

I actually support the tax, since I believe we need to fund the arts in the city, and I can certainly spare $35 to do it in this way. My only regret is that it's not pegged to income. It's ridiculous that the richest resident of Portland pays the same amount as I do.

I'm thinking a pro se declaratory judgment action under Chapter 28 in Mult Cir. Ct. agains the City as one counrt anda second count agains he City and PPS for the Measure 5 violation, parallel o what resulted in he Eugene ruling 6 or 7 years ago.

If i isnt facially unconstitutional as written under he head tax provision of the Oregon Constitution, a least the part that is directed o PPS exceeds the Measure 5 limits and can't be collected, per the Eugene decision.

If anybody knows of any group planning to file a case, I'm happy o volunteer as the test plaintiff.

I agree. $35 isn't much over a year, but the way this turned out is appalling. Even the WW recommended not voting for it, but what do the sheeple of Portland do? They approve it. Now we have a new species of regressive and invasive tax to contend with. How about next a poll tax? It doesn't matter if that's illegal, either.

So CoP defines a "loss" as "income"...what? Why don't we just let CoP re-write our federal tax codes. The know-it-alls.


M5 limits property tax rates between two delineated categories: education and local government.

How is the art tax a property tax?

I'd love to make the leap with you but I just don't see it.

If the courts do rule against the tax, the long term prognosis is not very good. Voters have already shown that they'll support this sort of dumb slush funding. It wouldn't be hard to rewrite it as a bracketed income tax and pass it again.

"Income" includes, but is not limited to…”
A reality check of other income not listed which may or may not be part of the City’s all inclusive everything list includes” rent assistance, $7.50 per one-way TriMet trip (transit operations are 75 percent subsidized), food stamps, the money received for selling a depreciated car, transport provided by an employer, anything received for free, garage sale proceeds, developer subsidies, any discount on fees or taxes paid, so on and so forth. What next – all the change a person receives from a dollar.

"...regardless of whether it is taxable under state or federal law."

That seems awfully f'd up as well.

"sales of stocks and other property (even if sold at a loss)"

Dear god, these idiots in the city are just daring people to say no aren't they? Of course, Randy made a career out of taking that bet.

That's the problem in Portland, most people just haven given up.

BTW - I thought they already had a gross receipts tax on something else?

I think a law firm that takes this on can look forward to a future of never getting any government work in Oregon.

I think a law firm that takes this on can look forward to a future of never getting any government work in Oregon.

A similar tactic was used in Easter Bloc countries to discourage challenges to the system.

Don't Pay!
Don't Pay!
Don't Pay!
If you pay this ridiculous head tax (can anybody be excluded?) my opinion of you is less.
Don't Pay!
Don't Pay!
Don't Pay!

Unfortunately, by the time this mess expands "yes another mess" created by the royal five down there, there will be negativity towards the arts. There will be individual artists whose income may most likely will be hurt by this tax. I can see it now at art fairs, someone wanting to buy a ceramic bowl etc. telling the artist, sorry but our family spent our $105. (or whatever amount) on that art tax.

Okay 2 questions you Tax experts:

1. How can CoP write regs or laws that trumph Federal or State laws?
"A. "Income" includes, but is not limited to, all income earned or received from any source, regardless of whether it is taxable under state or federal law."

2. Is this head tax (call it what it is)
exempt from Tax Compression regs? If
it is why? I hear that Portlands
compression is severe at the moment.

Imagine two meals. Add one unwelcome guest. The first is a small, frugal meal with water. The second is a lavish ten-course catered dinner with a bar. The City will come to both houses and eat exactly the same amount at both tables. The difference between the two is that, in the first home, there will be no leftovers for the following day and, in fact, some in home #1 may go hungry at the meal when the City of Portland sits down at the table.

That's before the City gets up from the table and starts rooting through your financial files to make sure you didn't short it on the hors d'ouevres.

The impression I get from the "not a stone shall go unturned" added income hunt is that not even people living at the poverty level are safe if they have managed to sell a few things on Craig's List or eBay to stretch their part time income or unemployment. Heaven help them if they receive child support or social security because adding that to their meager income may push them into the zone that makes them another potential chicken to pluck for this head tax.

The city officials had to know how this would affect people across the board. Perhaps they should have consulted with the Office of Equity before "setting" this up. What exactly is this Office of Equity for anyway?
By the way, did Amanda vote for this?
If she did, I find it hard to believe that she understands fairness and equity. So now those with child support payments, disability,and a whole list of folks are to pay? So some can get exemptions, well what about those on the edge, what about those who don't think it is the city's business to know all this?

NW Portlander,
As we are commenting here, I also think about those students who have horrendous loans to pay, expensive books, and in a household sharing costs, or whatever their living situation, they too have the burden of paying this head tax?

Jack -
If I were a cynical person, I might think that the regulations, as opposed to the text of the ordinance, might be an attempt by VanDyke's shop to recast, after the fact, the whole thing as a gross receipts tax, and avoid the fatal "head tax" label.

Might explain why he regs were so long delayed.

VanDyke's shop is a ad bit sharper than he clowns who drafted the ordinance and ballot measure and pressed the City Council to refer i as a ballot measure.

Nah, couldn't be. That's just too cynical.

Nothing they can do to the definition of "income" is going to make this less of a head tax. I have no doubt that they are trying to salvage it, but it won't work.

Hey, Jack, City Resolution 36939, which authorized the placing of the Arts fund and tax on last November's ballot, did not have these definitions, such as gifts as income. Eric and I at the Ballot Title challenge in Multnomah Circuit Court raised this as a real possibility, the City was not in any kind of conformance with common understanding among citizens as to what income and income earning mean.
This only points out how Oregon's voter referral and initiative processes have been corrupted by government officials sympathetic towards public employee unions who waged war with Bill Sizemore; and with politicians subsequently rewriting the referral and initial process so that government bureaucrats standing to benefit personally, write or rewrite the ballot Title and summary in the aftermath. And if challenged, Oregon Statute dealing with measures allows less than adequate description of the measure's effects.
I think Washington State actually has a more neutral and impartial referral and initiative process, by comparison. For all intents and purposes, the Citizens Initiative process has been corrupted badly in Oregon, as part of the Sizemore and union war in the late 90s and 00s.
My hope would be Oregonians could bring back neutrality to ballot titles and summaries, possibly allowing randomly selected juries of citizens with high school and college degrees to write the titles and summary. Such process is used by Multnomah Circuit Court for reviewing Jail procedures from time to time.

the City was not in any kind of conformance with common understanding among citizens as to what income and income earning mean.

That may be an issue, but the real fatal flaw is the unconstitutionality. Your judge got that one wrong.

The beaurucrats are not interested in your thoughts or what is or is not legal. PERS is in serious trouble so they will say it is for the arts or the children it doesn't matter. They need more money so they can continue to ignore the PERS problem AND hire more beaurucrats so more can do less.

I recently incorporated my new small business outside of Portland why again? Oh yeah.

Are you aware of anyone that has started a PAC to fight this obscenity? I sure would like to send them $100 to get going on turning this illegal head tax around and stop the money grubbers in their tracks.

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