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Wednesday, March 6, 2013

Portland arts tax goes beyond weird

We still can't believe that if you sell property at a loss, the City of Portland is going to call you an "income earner" on account of that, and subject you to the new so-called "income tax" for the arts. It's one more bizarre feature of a tax scheme that includes 10 months' retroactivity, treating gifts as income, and imposing the tax on people based on the income of other members of their household.

Example. Mom has a good job. Her arts tax is $35. Dad stays at home and raises the kids. He has no income in the normal sense of the word. The oldest child, Daisy, just turned 18 and goes to school full-time. Daisy has no income in the normal sense of the word.

One of the younger kids brings home a flower and gives it to Dad. Dad now owes the city $35 arts tax. Daisy finds a penny on the ground, picks it up, and puts it in her pocket. Daisy now owes the city $35 arts tax.

Just because it's ridiculous doesn't mean it's illegal, of course. But leaving aside its legality for the moment, this tax is as stupid as Opie Sten's "free municipal wi-fi" fantasy. It's right up there with "voter-owned elections." It's a product of not very bright politicians and vicious bureaucrats, living in a complete and utter fantasy world.

Comments (33)

Seems obvious enough to me, CoP has fully embraced the concept of "Cash Basis" accounting. As Cash comes in, that is the Basis for taxation.....

So, I guess it means if I received a lousy tie for Christmas I have to pay the head tax. Wow, just wow.

I wish the local media was on our side.

It seems fairly simple. DO NOT PAY THE TAX. Even by delaying to pay the tax the penalty is $15 if paid prior to 10/15. If the city has to expend time and money catching up to a majority of Portlanders they will soon exhaust their budget.

From the city code:

5.73.090 Limitation on Costs.

A. The Revenue Bureau’s first year start-up costs are capped at $500,000. Ongoing administrative costs are capped at an average 5 percent or less of Gross Revenues over a five year period.

Another scary thing, in my opinion, is if you chose to pay on line, now the city has more information on you. IP address, number of wage earners living in your home that aren't living in poverty, CC number and the last 4 of your SS number. What are the guarantees if the "Income Tax" as noted on the postcard, is found to be illegal will the city delete all the data mined from the setup website and not sell the information to an advertising outfit. My guess is that it will be public records all your personal info.

It's a product of not very bright politicians...

Or maybe it is the product of very bright politicians and not so bright voters.

It's stranger than that, Jack. Get this:

Say Mrs. Rich earns $250,000 a year. Mr. Rich is a stay-at-home guy who earns no money at all--zero. Mr. and Mrs. Rich only pay $35.

The Poor family have four adults living under on roof. Mr. Poor earns $10,000 a year. Mrs. Poor also earns $10,000. Their son earns $5,000 a year and their daughter earns $5. Because the household earns more than the poverty level, everyone must pay.The poor family must pay $35 x 4 = $140.

But, wait, it gets even more cockamamie ...

If Mr. and Mrs. Poor kick their kids out of the house, then none of the Poors have to pay.

Is there a draft of a lawsuit against the arts tax floating around? If so, would you link to it?

Excuse me, but no matter how many times I read this a couple of things are consistent:

1) The fee is $35 if you make $1M or $50K a year so I can't see if being income based

2) They spend an inordinate amount of time limning what makes you a Portland resident (they don't mention a high capacity for psychic abuse though).

This is purely a head tax or, if the vote is in Portland, a poll tax..

"It seems fairly simple. DO NOT PAY THE TAX."

I'd say CYA and do what they say:

Protests A. A taxfiler may protest a determination by the Bureau that the taxfiler owes the tax or any penalties assessed provided the taxfiler meets the requirements of this rule.

The people running this place are such a vindictive bunch, they'd use an excuse to go after anyone who dares not pay their tribute.

People keep talking about some notice they got in the mail about this artsy fartsy tax thingy. What notice? I never got one...

All our tax bills come from Multnomah County or the State. By what authority does the CoP tax income?

"By what authority does the CoP tax income?"

I think any governing authority that can convince the voters to approve a tax or bond can levy it.

Mult County and the state are just the collectors that take there cut and then give CoP the net receipts.

I think.

Say Mrs. Rich earns $250,000 a year. Mr. Rich is a stay-at-home guy who earns no money at all--zero. Mr. and Mrs. Rich only pay $35.

But somehow I think that the CoP would consider the room and board that Mrs. Rich provides Mr. Rich was a gift, so they would both have to pay. Making their cost $70.

For the Poor family I am assuming that in your example both kids are over 18, otherwise it would be just the parents owing. (Or maybe not, does the income of minors count towards the parents poverty status?)


I did assume that the kids are over 18, which was important for my example.

However, you raise an important point. If the kids are under 18, they don't pay the tax, but they earn enough money to push their parents into taxpayer world.

As I've said many times, this is the only tax I know of in which your tax burden depends on the income of other people.

I just returned from my tax guy. I asked for a copy of the City Income tax form and he gave me one. There is entirely too much information required on the mail in form, name, address, last 4 of SS number, email address, home phone number, number of residents with income, if you file jointly and only one works, the tax is then 35 times 2 ( they do have a nice little part of the form were you can put in the number of residents and actully see how much to pay 1X35= 35 2X35= 70 3X35= 105, that's so helpful)

They aren't getting my personal information nor the 70 dollars they think I owe.

Steve:"I'd say CYA and do what they say."

I'm betting that the tax will be overturned. I am also not willing to give the city the information that they ask for on their form.

A $15 (paying prior to 10/15) or $35 (paying after 10/15) penalty is worth the risk. It's not like I'd be going to jail where I could buff up a little bit on the city dime.

"going to jail" might be the only alternative for some to get housing, medical care and food if they paid this crazy tax. But I think many will not pay. Rightfully so.

Another scary thing, in my opinion, is if you chose to pay on line, now the city has more information on you.

In my opinion, I will add very scary and unacceptable to give our city this kind of information and it is none of their business! I have protested this from the beginning.
I can only envision the arts have been used here to implement this for later nefarious reasons. To set precedent for all kinds of head taxes? To use as a fishing expedition somehow for housing data and plans? To find out how many youth and ages that might be ready for future "workforce" housing projects? To find out income levels of all people in our city for some kind of data, to sell to make money? Who knows!!
What I do know is that council who voted for this cannot be trusted.

My accountant said that CoP recently has asked several of his clients to now send in their full IRS tax statements so they can audit/verify their city tax statements. Very unusual.

I think this art tax process is going to be more interference into our lives if it prevails-a door to more auditing, repercussions and misuse.

The more information they have about us, the more they can come up with their behavioral projects!
Don't give it.
What happens if one has to stand in line for days to pay this in person?
Portland arts tax goes beyond weird

I say just keep holding your nose and voting for these Clowns!!

However Iam more concerned about you're neighbors who continue to vote for this dookey.

The City's definition of income is now circuitous because it now would definitely seem to include the Oregon Trail Card as income. And yet the Oregon Trail Card itself is also used as proof of the poverty exemption; and yet, if it is income, it very likely pushes the recipient out from below the poverty level.
The City by broadening the definition of income is actually weakening its case the tax isn't a head tax. Because the more the definition of income is broadened and liberalized, the more almost all adults qualify to be charged the $35 flat fee (which by definition makes it a head tax).
In addition, another stupid thing about this tax is an adult resident is considered owing the tax unless he or she can prove otherwise. Yet some folks are not required to file forms such as income tax and surely most people getting a gift don't receive documentation.

Now how do you prove you didn't receive a gift?

At some point, we have to ask ourselves what the hell is going on here in our community???

Is this really about the arts?
Is the fluoride really about the low income children?
Are the millions really coming?
What about stenchy?
Add to the list. . .
Does any of this make any sense?

Check your mail folks. I just got a reminder to pay it.

Maybe if everybody requests and exemption we can gum up the system.

A major recipient of the Arts Tax will be the Regional Arts Council which will disburse funds to area cultural groups. As many have noted, this isn't the purpose that many, if not most, voters understood. OK, we bit at the deception. Now not enough tax revenue will go to art programs in public schools. Here's a thought: RACC is partly funded by the Oregon Cultural Trust. Let the OCT board know that they need to drop RACC from their list of grantees. Don't stop at that; let OCT know that you'll never make a contribution unless they also drop every nonprofit that receives a slice of the Arts Tax via RACC. It sounds arcane--probably is--but, if taxpayers grouped together, it might get the attention of OCT which in turn might want to have a chat with RACC and our noble commissioners.

It appears to me that the CoP voters are getting what they deserve: a nuisance tax with no sunset date. Forever is a long time. I wonder what $35 will be worth in 2023?

I certainly have spent more than $35 of my time looking in the vain hope of a court challenge, but so far none appears on the horizon. A Mult Co court judge ruled prior to the election that this was not a head tax.

I agree with most of the observations expressed on this blog. Reading the CoP FAQs I have to wonder if homeless people who panhandles & collects state aid must pay the tax? Something to ponder as you write the check.

Another weird thing: They hope to receive payment for over 340,000 people that owe the tax and over 45,000 exemption requests. And if the exemption request doesn't make it on time, there is a $15.00 or $35.00 penalty for failing to file the exemption request. Huh?

Plus the homeless person owes the $35.00 tax for not filing the exemption request. $50.00 or $70.00 total owed for someone who makes zero income and probably didn't even know about this 'tax'.

I'm innocent until proven guilty. I have a right against self incrimination. I don't have to prove I'm poor.

Just got off the phone with the Arts Tax people to find out how I file an exemption to this charge since I had no income.

I was informed that I have to pay because my spouse has an income, and since my name is on our joint checking account, the interest from that counts as income. So I have to pay a $35 tax on an income of about $10.

Also, I was told one would have to prove one has no income. "How do I do that?" I asked. "Send a copy of your income tax forms." Never the mind the fact that, if you have no income, you don't file income tax forms.

So now the city council is debating on raising the income limit to $1000. Why $1000? Does the council have the power to change a law? What else can they change? What good is voting?
This was a stupid measure from the start.


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