There's an important article in the New York Times over the issue of raising taxes on those who make over $125,000 and small businesses in a time of recession. In the small town of Central Point in Oregon, schools have faced major cuts to their budgets to the extent they only have a four-day school week to teach students. That alone tells you about misplaced priorities, avoiding taxes, and sacrificing our children's educational opportunities as a result.
Supporters, led by teachers and public employees’ unions, point out that the income tax increase affects less than 3 percent of the population: individuals who earn more than $125,000 a year. They say the state’s wealthier residents should pay more to help those with less. They also say that state businesses enjoy a relatively low tax burden and that most small businesses will pay only $140 more in fees.
Opponents say the proposals are the wrong fix at the wrong time. State income taxes for wealthier Oregon residents are already among the highest of any state. But the most notable opposition may have come from powerful business groups and prominent executives like Phil Knight of Nike, which is based near Portland.
The conservative opposition to the small tax on the business and on those who earn more than $125,000 is that it provides a disincentive to hire people. That myth was already debunked when the issue of increasing state minimum wages came up as chronicled by Think Progress in 2006:
1. A higher minimum wage does not mean higher unemployment. One comprehensive study found increases in the minimum wage in various states in the late 1980s and early 1990s did not result in increased unemployment. It found a minimum wage increase in New Jersey did not cause a decrease in lower-wage jobs.
2. Small business growth has been greater in states with minimum wage levels above the federal level. A report by the Center for American Progress and Policy Matters Ohio found that the "11 states with a minimum wage above the federal minimum of $5.15 per hour had higher rates of small business growth between 1997 and 2003."
3. State minimum wage hikes have increased payroll and revenue without creating job loss. A recent report from the Wisconsin Department of Workforce Development said last year’s increase in the state’s hourly rate — to $5.70 from $5.15 — produced $175 million in additional payroll and a $3 million boost in state tax revenue.
There's also another problem that Oregon has, as shown in the NYT article:
Oregon is one of only five states with no state sales tax, and voters have repeatedly rejected ballot initiatives to create one. In addition, a statewide cap on property taxes limits how much local governments can raise rates each year.
....
When times are good, the state sends kicker refunds to residents from revenue that exceeds forecasts by state economists. In December 2007, just as the country was entering the recession, Oregon returned $1.1 billion to residents, bounty from the previous boom year, because of the kicker law. By the spring of 2009, as Oregon’s unemployment rate was on its way to becoming one of the highest in the nation, the Legislature was voting to raise taxes by $727 million, the increase now before voters.
This sounds a lot like the state refund law in Alaska that was promoted by Sarah Palin. There'll be a lot of discussion and pushback from conservative Democrats and Republicans in raising the taxes on the wealthy in a time of recession. We need the revenue that comes from such taxes at the state and federal level. It's time for those who can afford such taxes to do their fair share in this society. The middle class has suffered too much, and the burden on them is disproportionate to the small burden on the wealthy. It's time for them to do the right thing.
When you have conservative Democrats pushing to extend the Bush tax cuts on the wealthy---that's when you know they don't get it. And Bob Herbert illustrates this very well in his editorial about the widening gap between politicians, the rich, and the middle class.
With the power elite consumed with its incessant, discordant fiddling over health care, the economic plight of ordinary Americans, from the middle class to the very poor, got pathetically short shrift. And there is no evidence, even now, that leaders of either party fully grasp the depth of the crisis, which began long before the official start of the Great Recession in December 2007.
A new study from the Brookings Institution tells us that the largest and fastest-growing population of poor people in the U.S. is in the suburbs. You don’t hear about this from the politicians who are always so anxious to tell you, in between fund-raisers and photo-ops, what a great job they’re doing. From 2000 to 2008, the number of poor people in the U.S. grew by 5.2 million, reaching nearly 40 million. That represented an increase of 15.4 percent in the poor population, which was more than twice the increase in the population as a whole during that period.
The question for Democrats is whether there is anything that will wake them up to their obligation to extend a powerful hand to ordinary Americans and help them take the government, including the Supreme Court, back from the big banks, the giant corporations and the myriad other predatory interests that put the value of a dollar high above the value of human beings.
The Democrats still hold the presidency and large majorities in both houses of Congress. The idea that they are not spending every waking hour trying to fix the broken economic system and put suffering Americans back to work is beyond pathetic. Deficit reduction is now the mantra in Washington, which means that new large-scale investments in infrastructure and other measures to ease the employment crisis and jump-start the most promising industries of the 21st century are highly unlikely.
And another sense of misplaced priorities you see in Washington comes from the Senate conservative Democrats favoring the excise tax on families over that of the tax on the wealthy as a way to get revenue, even though that the tax on the wealthy would produce MORE in terms of revenue for the government. At every turn, these conservative Democrats have joined with their Republican colleagues in opposing taxes on the wealthy, and calling for reducing the deficit at the state and federal level through cuts to social programs like Medicaid, Social Security, Medicare, food programs, nursing programs, home programs, and educational programs, and avoiding the issue of raising taxes on those who can afford to do their fair share in this time of recession.
In a recession, it's always the social programs that get the cut, not the national defense budget, or other excessively bloated programs, and with avoiding taxes on the wealthy.
Our priorities have to change. It's time to stop this course that the Democratic Party is on. It's time to be populist, not to be centrist, and to be for the people, and not for the wealthy.
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