Tax hike initiative a quick fix that will cause long-term pain to Oregon taxpayers.
WASHINGTON – With January 28th only two short weeks away, voters in Oregon have a critical decision to make: Raise taxes to cover the bloated state budget\’s bloated spending commitments, or force Gov. Kulongoski and state legislators to make tough choices to ensure the Oregon\’s competitiveness in a difficult economy.
"Tax increases, be they temporary or permanent, are never the right solution for long-term budgetary problems," said taxpayer advocate Grover Norquist, who heads Americans for Tax Reform (ATR) in Washington. "History shows that economic growth from lowering taxes on citizens solves budget problems – not the other way around."
Oregon voters historically have opposed income tax hikes and sales tax proposals, and have not supported an income tax increase in the past fifty years. Measure 28, supported by Gov. Kulongoski, is a "quick fix" to the state\’s $310 million economic woes by \’temporarily\’ raising the state income tax.
"State governments have never seen a tax increase they don\’t like," continued Norquist. "Voters should not be fooled by the word \’temporary\’ – tax increases are hardly ever temporary. And in Oregon, with the second-highest unemployment rate in the country, a tax hike is economic suicide."
Oregon\’s budget shortfall is not the fault of too few taxes – it is the fault of over-spending during the boom years of the 1990s. During the 1990s, Oregon\’s general fund budget grew at double-digit rates, bolstered by the increase in revenue from income taxes. As the country experienced an economic downturn, income tax returns fell and exposed the overspending flaws in the state\’s budget. As quickly as government can increase spending, it should just as quickly decrease spending in the time of fiscal crises.
"When faced with a lagging economy, President Bush cut taxes, helping to end the recession; we are now beginning to see the results of that sound policy," continued Norquist. "Voters in Oregon must realize that real budgetary reform is necessary and now is the time to do it."