I tell you, it would be a hell of a lot easier to cut that check (actually, those checks, thanks to MultCo) if I didn't have to drive past the very successful and soon-to-be-closed-down elementary school in my neighborhood every day on my way to work.

C'mon, Dave, the school super's making only $203,000, plus "performance incentives." It's worth it.

The contractors in the school district's Advertising/Marketing department can do almost as good as the Super. You know, if you don't actually teach in the school district, the pay's not too bad.

full time employment for
tax law professors
right wing wacko talk show hosts

smoke em if you've got em...while it's legal
lars

I wrote my "save the children" check to Multnomah County last week. I can't begin to tell you how well I slept, knowing I did the right thing. It warms my heart to know that Diane Linn can run her naked toes through that plush, grass roof on the admin building come June. The Klingon interpreters can play croquet up there, too!

Wow, no wonder I got so crabby, and I was way down the income totem pole, which isn't much protection in Oregon.

I've no reason to understand the alternative minimum tax, Jack, but I did note this piece in yesterday's New York Times, which the rain had me reading oodles of; thought you might be interested.

http://www.nytimes.com/2005/04/10/business/yourmoney/10view.html?

Bojack,

I'd be interested to see the numbers for Portland revised for next year when the local income tax disappears.

A few things to point out:

Some 80 percent of Portlanders are in a household with less than $75,000 income. In other words, about four of five Portland households don't pay as much in income taxes as the figure used in the study.

More than one-third of Portlanders don't live in an owner-occupied home. They don't pay property taxes.

In 2003, the average property tax bill for an owner-occupied home in Portland was about $2900, or 30 percent less than the figure used in the study.

Actually, renters do pay property taxes (I've not met a landlord yet who didn't factor that cost into the rent). And unless the landlord is claiming the homestead exemption (and not many would be eligible) the renter will pay more property taxes than in owner-occupied housing. And given Oregon's basically-flat income tax, the percentage of income numbers are probably correct, regardless of the number used for income.

That's too bad about the school. In my city, the school district tried a similar number, but we beat them back. Now they are claiming that keeping our school open will require firing 20 teachers. (rolling eyes)

I'd be interested to see the numbers for Portland revised for next year when the local income tax disappears

You'll have to wait two years. The study used 2003 numbers.

In 2003, the average property tax bill for an owner-occupied home in Portland was about $2900, or 30 percent less than the figure used in the study.

Hmmmm, should I trust Money magazine, or you?

OK...I know I WILL catch hell for this, but, Why the hell do you people cry if you won't do a damn thing to stop it?

Can you just think about human nature for just a bit? If the recall I lead against Vera, and the one against Linn had been successful, do you think that these people would be so "arrogant"(Leonard/Linn, and unwilling to listen, (Linn/Leonard) if one or both recalls had dropped one of them? Don't whine, it's not very adult of some of you.

Are the figures including the Multnomah County income tax? Yes, I know it says the year 2003. But, the total income tax burden, from these figures calculates out to be 6.5%, which I am assuming is reduced by the federal tax burden as it is on our returns.

Also, it seems they picked a random city in each state plus DC, thus the 51 cities total. Plus, the county tax is an anomoly, nationwide.

Hey, however you slice it, we're the worst in the West by far.

I'm not suggesting the figures in the Money magazine study are wrong or that the study doesn't have merit. I'm simply saying that the Money dollar figures are higher than what most Portlanders pay in taxes. The study is based on higher-than-average income families owning higher-than-average valued homes. And not everyone owns a home.

Lets say a study is done this week on the total dollar ammount spent on gas. But it only included SUV drivers who commuted 45 miles each way. It wouldn't be representative. Most people drive fewer miles in a more fuel efficient car. Some don't drive at all. If somone brought this up, it wouldn't be to suggest gas prices aren't too damn high.

Is the $75K an average, or was the study comparing 75K incomes? I took it to be the former. I understood that the endpoints were averages, which itself is a problem but would still make the case the article alludes that it does.

Noting: I do, as Bart does, believe renters pay property taxes ... while we all know that rich condo-owners in at least the Pearl District do not. (Thanks, Erik, in case I haven't mentioned it yet this week.)

Multnomah County may come in significantly differently than does the rest of Oregon. And while the state registers quite low on the tax-comparison scales, individuals register high.

It's a puzzler.

Blah blah, nitpick the details. They picked $75K because they were conducting a national comparison, not because they were trying to pick the average family in Portland. If they used $60K, or $50K, I am sure the results would be the same. The Rose City is the pits on taxes. No sense denying it.

Even before the Mult. Co. income tax, we were the worst in the West.

If you find a better survey on the tax climate of the big cities, folks, I'll gladly read it. 'Til then, we're no. 6.

The 75K is the income they used. Not an average.

This is a straight city by city comparison of tax burdens for a famly of four with an income of 75K.

The Multnomah County Income Tax was not included for Portland. If it had been Portland would be around the 3rd worse.

There are renters who pay rent to cover property taxes which have been exempted for the landlord owners.

A new on coming up is the upcoming first South Waterfront Tower Apartments will be getting nearly the entire $66 million cost exempted from property taxes for 10 years. The renters will be paying market rates and the exemption will go right into the devoloper/landlord's pocket as they will simply keep what they would otherwise have to pay in property taxes.
Figured out at 1.5 million in property taxes per year for 10 years this will require backfilling by other property owners (you)in order to provide city services to the exempted building and to pay that building's share of other city budgets.
Insane by any measurment but in the case of this
Tower the developers were already gifted an enourmous windfall when the city council approved zoning changes which doubled the allowed height of their building. Imagine the many millions that meant when the prior 150 ft limit was increased to 250ft and 325ft.
And NOW the council is going to give away ten years of property taxes?

The full report (pdf), conducted by the D.C. government, is here.

Portland was 5th or 6th highest at every income level, and the assumptions used seem very reasonable to me.

GOD! Jack...don't agree with anything DC say's, you will be on the "out" with the Blues here.

You are right....DONT BACK DOWN!

And yet, Oregon, as a whole, is ranked as one of the more "tax-friendly" states (36/50) for state and local taxes as a percentage of per capita income.

http://money.cnn.com/pf/features/lists/taxesbystate2005/index.html

Tell me again, why is it that people live in Portland?

Good question. I know why I moved here 27 years ago. But I'm not sure why (or even if) I'd move here now. Beer? Wine? Music scene? Bike lanes? Fresh air? Clean streets? Liberal politics?

Certainly not jobs. Or cost of living. Or superior public schools. Or low crime. Or ease of commute. Or small-town convenience. Or wise government.

And it sure ain't the tax system, which is what this post is about.

The G.F.O.S (Godfather of Soul) calls it "the Big Payback". In the final analysis, overwhelming taxes are the bitter medicine which will always accompany big government and liberal, social engineering causes. If you continue to buy the theory that throwing guilt money at failed educational systems will solve all your problems, don't cry when the bill comes. If nobody is home to check the homework, and put kids to bed before the 11PM WB television show, paying school administrators double six figures is your big payback. Social progress begins at home,and may even be slowed down by liberal do-gooders who insist on supplying unnecessary crutches for unworthy causes.
As one who has had a fulltime job since the age of 17, and gets up at 5AM for work, I don't want to pay excess taxes for those who are looking for an easier road to comfort. Drive through an urban area like Newark, and see the expensive SUV's and BMW's and then ask for more suburban tax dollars for the schools. For me, enough is enough.

Brother Gary...AMEN! Would you like to run for Randy's job? Your words alone are worth my vote right now.

Jack, if you could move anywhere, where would you move? What city is better than Portland?

Good question. I know why I moved here 27 years ago. But I'm not sure why (or even if) I'd move here now. Beer? Wine? Music scene? Bike lanes? Fresh air? Clean streets? Liberal politics?

But can't you get all (or most of) the above in, say, Yamhill County? or Marion County?

Certainly not jobs. Or cost of living. Or superior public schools. Or low crime. Or ease of commute. Or small-town convenience. Or wise government.

I'm not sure that you would find a decent combination of ANY of the above in a city of over half a million.

And it sure ain't the tax system, which is what this post is about.

I agree. Oregon's tax system is broken. It's a two-legged stool. IMO, we need to add a modest third leg (state sales tax), and reduce property and income tax rates across the board.

But can't you get all (or most of) the above in, say, Yamhill County? or Marion County?
Beyond the beer, the list would be kinda empty.

I'm not sure that you would find a decent combination of ANY of the above in a city of over half a million.
Portland HAD a great combination of all those 20 years ago. Fiascos such as the Pearl District, the Tram, et al, are leaving the families in homes at the mercy of increased crime, fewer jobs, and higher taxes.

we need to add a modest third leg (state sales tax), and reduce property and income tax rates across the board.
We should eliminate property taxes entirely, then pick between income or sales tax. Taxing folks twice is reprehensible.

Beyond the beer, the list would be kinda empty.

Surely you jest. Excellent beer, wine, fresh air, clean streets and even some liberal politics are available in cities such as Mcminnville, Dundee, Newberg, Silverton and others.

Portland HAD a great combination of all those 20 years ago. Fiascos such as the Pearl District, the Tram, et al, are leaving the families in homes at the mercy of increased crime, fewer jobs, and higher taxes.

That may be true. And logging trucks used to roll down Front Street as late as the early 80s. Change happens everywhere, including Portland.

We should eliminate property taxes entirely, then pick between income or sales tax. Taxing folks twice is reprehensible.

I disagree. Not taxing property-owners is just as irresponsible as not taxing consumers or not taxing those with income. Multiple taxing structures are necessary to capture as many funds as are needed without overburdening one or more classes of people, and to diversify away the risk of shortfall.

Not taxing property-owners is just as irresponsible
Taxing property is wrong/evil. It's paying rent on something you own, instead of leasing it from the state.

Scott R says
""" Not taxing property-owners is just as irresponsible as not taxing consumers or not taxing those with income. Multiple taxing structures are necessary to capture as many funds as are needed without overburdening one or more classes of people, and to diversify away the risk of shortfall. """

That's funny. Income earners, consumers and property owners are, in general, all the same people. Slapping them with multiple taxing structures overburdens them all.

In Oregon, "capturing as many funds as are needed" means more, more, and then some.

As example of the wrong direction is last week when the Oregon Senate passed a bill which included a 4% real estate transfer tax.
Democrats slipped it into the tax amnesty bill and nearly every Senator voted for it.

Were they just "capture as many funds as are needed"?

Okay, the burden on families in Oregon & Portland is great, too great. But why aren’t we talking about corporate taxes? Corporate taxes in this state have been dropping for years. Oregon (for years) has had the distinction of being the state with the lowest business tax burden (by far) of any of the seven western states.

State of Utah: Western States Tax Burdens>

When corporations don’t pay their fair share, Oregon families make up the difference.

Scott R said:
"That may be true. And logging trucks used to roll down Front Street as late as the early 80s. Change happens everywhere, including Portland."

And did you notice that pervasive throughout this thread is the wish that we could go back to those days before all fiascos? Coincidently that was the same time when those "evil" logging trucks were rolling down Front Street. A major part of the reason that Portland ranks so high on the tax list is because we've run so many industries out of this state and out of Portland in particular. Maybe a logging truck or two wouldn't be so bad. Also, I'm not sure how you are able to compare the "bad things" that (the other) Scott lists - rampant spending and unwise tax breaks that are leading to increased crime, high unemployment and high taxes - to the "bad things" you list - logging trucks on Front St. No comparison if you ask me.

Scott R said:
"I disagree. Not taxing property-owners is just as irresponsible as not taxing consumers or not taxing those with income. Multiple taxing structures are necessary to capture as many funds as are needed without overburdening one or more classes of people, and to diversify away the risk of shortfall."

Wow, where to start on this one. First of all, several states only tax 2 of the 3 main areas, and I bet that almost all of them are in better financial shape than Oregon is right now. And yet you're saying that they are irresponsible? In general I agree with (the other) Scott in saying that nothing you buy should be continually taxed for the rest of your life, with the possibility of forfeiture if you don't pay said tax. I don't imagine any of us would like it if we applied a property tax to any other of our purchases, like cars, electronics, or what have you. I believe that the irresponsibility lies in how Portland is spending their money. You state that multiple taxing structures are needed to raise the funds "needed", but who dictates THAT level? We've continually told our local leaders that we don't believe more funds are needed, but they repeatedly raise every other fee structure they can, and disregard our votes to push along their pet projects anyway (ie light rail). So who's being irresponsible here??

And let's be honest here - THERE IS NO SHORTFALL OF FUNDS. The only reason that we're being told there is, is because our leaders weren't being fiscally responsible during the go-go 90's, when money was flush. Instead of holding the line on spending, they increased budgets on every damn program out there, in some cases at pretty ridiculous levels. Then we have a couple of down years were revenues came back out of the stratosphere, and suddenly there's a shortfall? And now we're being asked to tax ourselves more? Are you kidding me?

Just my 2 cents. Which is probably only worth half of that.

Let me start by saying that I am not in favor of excessive taxation, and I think that Portlanders are heavily taxed.

As Jack might agree, tax levels are driven by an entity's need for funds. Plain and simple. Each year, the entity determines that it requires X amount of revenue to administer and provide services to people within the entity's boundaries. How it gets to that number is a combination of law, economics, politics and public policy.

The root of the problem is with Portland's determination of needed revenue. It's either overestimating (it *is* fat on funds) or providing unwanted services (no need to give examples), or both. The second part of the equation, getting to X revenues through various taxing structures, just feeds the beast.

There's a reason that EVERY state in the union imposes some kind of ad valorem property tax on property owners - because property taxes are not directly linked to yearly fluctuations in the economy. There's some stability and predictability there (especially with the passage of Measure 50). Not so with peoples' incomes and consumer activities.

But at the end of the day, the taxpayer (through whatever taxing structures are used) is simply feeding the beast. The city, county, state and any special districts are going to continue to need their funds. What difference does it make if you have to pay $10,000 in income tax, or $10,000 spread across an income, property, and sales tax?

Steve said:
That's funny. Income earners, consumers and property owners are, in general, all the same people. Slapping them with multiple taxing structures overburdens them all.

Let's go with that for a moment. Are you, then, in favor of a flat income tax? And by flat, I mean a specific dollar amount that EVERYONE with income must pay. Let's assume that $8000 per person per year would meet the state's needs. If every Oregonian had to come up with $8000, the state would have enough revenue to meet its needs and everyone would carry the same burden, right?

Not fair, you say? Why not? It's a simple one-structure tax, isn't it?

Larry:

RE: the logging trucks, I was not attempting any kind of comparison. My point was that 20 years ago was, well, 20 years ago. Communities don't stand still - some change for the better and others, for the worse. You can't turn back the clock.

RE: taxing structures, I still stand by my assertion that it would be completely irresponsible for an entity to not tax property, and it is irresponsible for a government entity to not pursue strategies to minimize the risk of revenue shortfall. These assertions are based on the assumption that entities accurately determine their revenue needs.

As you posted above, and as I posted right below you, the problem is in the revenue determination.

So, am I listening to a whole bunch of pro-TABOR people here, the new McIntire front I have reading about elsewhere?

Has increased spending kept pace with population growth? How much of government spending now is tied up in PERS dedications? My reading up to a few months back said this was taking slices of around 18-20 percent of entity budgets.

For all the bitching about taxes in Oregon, the state ranks relatively low in every comparison I have ever seen. However, the burden does fall disproportionately on individuals -- there, Oregon is close to the top.

You guys wanna fix it, or run with McIntire?

(Scott R: Oregon doesn't have a poll tax, but I believe its income tax is close to the highest and certainly the most regressive in the land. Sweetly in line with the Multnomah County Tax.)

(Steve S: might the state truly adopt a 4 percent??!! RE transfer tax?)

Sally: You caught onto my poll tax analogy. Darnitall! :)

But Oregon's income tax (like all graduated income taxes) is not regressive - it's progressive, because it's based on ability to pay.

But our property taxes, on the other hand, those are extremely regressive, precisely because they're NOT based on ability to pay.
Same would go for any sales and excise taxes - disproportionate impact upon those with the least income.

I'm up for fixing the taxation problem, but I'm also a proponent of instituting a sales tax. That makes me a bit unpopular around these parts - to both the pro- and antitax interest groups.

Oregon's income tax (like all graduated income taxes) is not regressive - it's progressive, because it's based on ability to pay.

It's not really graduated. Come on, you get to the top rate, 9%, at something like $6500 of income. That's a flat tax.

I thought it was $6,250. But a difference without a distinction: yes, it's not a "progressive" or graduated income tax in any meaningful sense.

Someone also should check into the property tax assessments post Measure 5. I have seen spectacular disparities. And because of that measure's provisions, they become rather locked in. Houses worth and selling for a third as much as others in the same general neighborhood can pay double in property tax what the high-value house does. It would take some thorough investigation to research it. I did it only in one neighborhood. I was shocked.

"Unintended consequences" of a public initiative to deal with a problem the legislative bodies kept sidestepping.

Sure, Jack, most people will wind up paying between 6 and 9% - but that's before the working family credit and any other credits they may pick up.

I wouldn't be surprised if a fair number of people actually have effective tax rates of zero under this system - especially those with kids and incomes below $25k.

Yeah, well, Oregon's income tax is not "progressive... like all other income taxes," and it's hardly "graduated." I was just correcting the very misleading impression that those terms leave.

Actually, property owners get a break on their income taxes. If you have $200,000 of wealth and use it to buy a house, you get the benefit of living in the house all year without paying income tax on it. If you put the $200,000 in the bank and use the interest to pay rent, you wind up paying income tax on that stream of interest. So perhaps it's not so immoral or unfair to ask the property owner to pay a levy every year, just as the bank account holder/renter does.

My apologies for misleading folks by generally characterizing an income tax system that contemplates differing tax rates for different taxpayers, depending on their taxable incomes, and increasing with taxable income, as progressive. In retrospect, though, "graduated" probably was an overstatement.

Property owners aren't the only ones who get breaks on their income taxes. People who provide services to or for themselves get breaks as well. The perennial "what is income?" question.

Jack, do you honestly believe that a state could efficiently fund itself without taxing property? If so, I would be intrigued to hear your alternative.

do you honestly believe that a state could efficiently fund itself without taxing property?

Scott R - Sales Tax, all the way (a la the Fair Tax Plan™). You don't sell (or buy) - no tax. There's no tax for the minimum necessities like groceries. Baloney like payroll- & estate-taxes are gone.

If The Poor™ figure this one out, there'll be marches on DC to have it enacted.

Scott: on a Federal level, it's interesting.

But on a State level? What level of sales tax would be required to make up for the loss of income and property tax revenues? 50%? 150%? Planning would be a nightmare, not to mention entrusting merchants with the task of collecting those massive sums. I just can't see it on a state level.

There are states with no income tax -- that's entirely do-able. I don't think you could realistically run state and local government without property taxes, however. The sales tax rate would be through the roof.

On another note, I doubt there's a sales tax on earth that doesn't tax at least some "necessities." Most pick up cars, televisions, phones, appliances, and tons of things that you can't live without. To exempt food doesn't really mean you've exempted the basic needs of modern life.

"My apologies for misleading folks by generally characterizing an income tax system that contemplates differing tax rates for different taxpayers, depending on their taxable incomes, and increasing with taxable income, as progressive. In retrospect, though, 'graduated' probably was an overstatement."

Graduated was an overstatement pre-retrospect, Scott R. Please acknowledge (just to yourself) that the maximum rate kicks in at 6+K a year. The person making $7K a year is paying the same rate as the person making $107K a year, or 57, or any other 7. Virtually all Oregonians pay the same flat-rate income tax.

Washington assesses sales taxes not only on goods (food excepted) but on many, many services. This sort of tax is seen as regressive in that the relatively poorer pay a greater percentage of their income in taxes than the wealthier do. Those who have been working to make that system more equitable suggest a lower sales tax rate and the addition of a graduated income tax. Many point to Oregon as more progressive overall.

When you insist on taxing the poor at the same rates as the wealthy, you will be paying for a lot more social services. From a point of sole rationality, it would likely argue better to tax no-one with income under some modest amount (25K? 50?) at all.

With no attachment at all to do-gooderness.

Many point to Oregon as more progressive overall.

How is this news? Washington tops the list for states with the most regressive tax structure.

http://www.ocpp.org/2003/issue030707.pdf

Almost any state would be more "progressive".

When you insist on taxing the poor at the same rates as the wealthy, you will be paying for a lot more social services. From a point of sole rationality, it would likely argue better to tax no-one with income under some modest amount (25K? 50?) at all.

Under what system? If you're talking about a true flat tax regime, it's doubtful. Voters would likely not accept a flat tax at a level that would generate enough revenue to sustain expenditures on social programs at current levels. As such, it's more likely that cuts in social services would occur in the face of projected revenue shortfall. Further, raising the income level from which one is exempted from the tax would only make matters worse - the narrower the tax base, the greater the burden.

"Under what system? If you're talking about a true flat tax regime, it's doubtful. Voters would likely not accept a flat tax at a level that would generate enough revenue to sustain expenditures on social programs at current levels. As such, it's more likely that cuts in social services would occur in the face of projected revenue shortfall. Further, raising the income level from which one is exempted from the tax would only make matters worse - the narrower the tax base, the greater the burden."

Under a brand new system, that exempts low income from taxes, period. If the "tax base" were narrower, wouldn't arguably the social-service-need base be, also? It's worth more thought than it gets.

I certainly would not argue for a flat tax, which is what I have been arguing that Oregon effectively has. I found it obscene that Oregon levies its top tax rate if you make $8 or $10K a year. Obscene. In Multnomah County, with an additional 1-1/4, triply obscene for the 15 percent add. I have little more or other regard for the lottery and cigarette taxes.

Actually, low income do better in my experience and opinion in Washington. Rents and utilities and foods are not taxed.

But as was said earlier, Oregon assesses the greatest tax burden on individuals. Therein may lie the difference.

Scott R,
No a flat dollar tax is not "fair" in our real world where those who make more pay more.
Heck a flat percentage is not even "fair" in our real world. It's not enough for some that a percentage means the rich pay more.

Sally,
No the legislature will not be passing a real Estate Transfer tax. Because the house will not allow it. I'm not a big fan of our Oregon Republicans but the Democrats in their newly controlled Senate are spewing out loony stuff.
They passed SB 50 to create Cultural Competency for teachers which reads like the babble it is.
They passed a bill to allow convicted prostitutes to become teachers.
They passed a bill to create a real estate transfer tax. And they aren't done.

Steve said:
It's not enough for some that a percentage means the rich pay more.

Too true!

Come to think about it, Steve, an RE transfer tax with a resident homeowner periodic exemption (every five years?) might not be an entirely bad deal.

Personally, I prefer minimal "social engineering" from tax policy. Bye-bye, sin taxes. Bye-bye, mortgage deductions.

Taxing the poor at the same rate as the rich reminds me of the old saying about bridges and who is free to sleep under them. I have listened to Bill Gates' daddy make impassioned pleas for taxing more those who benefit (even spectacularly) more -- by which to foster and sustain the same luscious system that makes it all possible.

Now there's a free thinker for you.

Heck a flat percentage is not even "fair" in our real world. It's not enough for some that a percentage means the rich pay more.

We've had a progressive income tax in this country for how long? Ninety-two years? No, a flat tax has never been fair enough.

I spent some time looking at the pdf file that was compiled in Washington, DC for this comparative study. It's what I've been asking for forever.

And just as I had come to be sure of, the taxes on the $25K annual crowd rank Portland not No. 6 but No. 5 in high-tax cities. Families in that income group are more heavily taxed in "progressive" Oregon than in "regressive" Washington. (And note, this is before the Multnomah add.)

All in all, that file is a keeper.

Jack, I hate to say it, but I am going to (with all due respect) call "hypocrite."

You have no right to complain about the tax burden in Portland. In your Tue January 14, 2003 post you told us all to vote YES for the “temporary” Multnomah income tax. Despite your experience with the tax system, you never asked how Multnomah was going to collect the tax and how much that would cost. You never asked what percentage of the tax was going to be eaten by Multnomah’s new IRS and how much would actually go to schools. You just got emotional, checked your logic at the door, and signed off on this silly power grab.

Now over two years later you bemoan that Portland is the 6th highest taxed city in the country. Well, you don’t have any right to complain. In fact, you only have your self to blame.

We've had a progressive income tax in this country for how long? Ninety-two years? No, a flat tax has never been fair enough.

And yet we've had the Alternative Minimum Tax in this country since, what, the late '60s? The AMT sure smells like a flat tax, and the number of middle-class taxpayers subject to it is growing exponentially.

You're darn right it's not fair.