Time Short to Launch Tax Reform Debate
Monday, August 13, 2012 at 1:18PM
Democratic Senator Ginny Burdick surprised many political observers when she came out against Our Oregon's proposed 2012 ballot measure directing all corporate kicker refunds to K-12 education. Our Oregon, the political arm of Oregon public employee unions, proceeded and successfully placed its initiative on the November ballot.
What was surprising is that Burdick had supported past Our Oregon proposals, such as Ballot Measures 66 and 67 in 2009 that raised income taxes on corporations and wealthy individuals. Burdick didn't criticize the substance of what Our Oregon was doing. She was unhappy because it wasn't a more comprehensive tax reform proposal. Burdick told Willamette Week, “All I can hope is, it doesn’t make the ballot. It will throw a monkey wrench into real financial reform.”
Burdick and other leaders believe only dealing with the corporate kicker with take the wind of out the sails of a larger discussion on restructuring Oregon's tax system, which relies heavily on income taxes that can sag when the economy tanks.
It is too early to tell how Our Oregon's corporate kicker ballot measure will fare at the polls this fall, but it appears Burdick could get her wish about a larger tax reform discussion.
Governor Kitzhaber and his top aides have been holding closed-door meetings with business and labor leaders about what tax reform might look like. Legislators for the most part have been left out of these conversations, which has riled many, especially in Republican ranks.
Kitzhaber is at the point where he needs to decide how he wants to lead on a tax overhaul initiative. He certainly talked about it as a priority during his 2010 campaign.
Tax reform brings a whole lot of hot-button issues to the table: the kicker law (corporate and individual), capital gains taxation, a rainy day fund and even a sales tax. States with more balanced tax systems (around sales, property and income taxes) arguably have a better chance to weather economic downturns. Is Oregon finally ready to have a tax reform discussion that centers on implementing a sale tax? Oregon voters have rejected sales tax proposals nine times.