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Why tax reform appeals to young families

You could call Linda Nezbeda the new face of education activism.

The 32-year-old mom has two children in Errol Hassell Elementary School in Beaverton. Until they enrolled in kindergarten a few years ago, she hadn’t realized how big classes had grown or how short the school year had been cut. Ever since, she’s been trying to make sense of Oregon’s byzantine tax system.

When she started asking questions, she says, eyes would roll and people would talk about the Ballot Measure 5 property-tax cut and how school funding has been a mess ever since.

Linda was a third-grader when that measure passed in 1990.

For she and hundreds of other parents who have joined her quest to bring more attention to education funding, BM 5 is ancient history. It’s irrelevant to fixing one of the nation’s most volatile tax codes. It’s irrelevant to finding ways to restore the 600 positions that have been cut in the Beaverton School District since 2008.

These young parents are the inspiration for the tax reform bill I co-sponsored with state Sen. Ginny Burdick and state Rep. Tobias Read.

Our proposal, Senate Bill 824, would build on the idea of cutting income taxes in half and replacing the revenue with a 5 percent sales tax. We worked with lots of groups to eliminate the “regressive” nature of a sales tax. We ended up making the tax a little more broad. We created sales tax offsets and expanded the Earned Income Tax Credit to protect low-income workers.

And we added a $50,000 exemption for property taxes: if your home is worth $100,000, your property tax bill is cut in half; if your home is worth $500,000, your bill is cut 10 percent.

This is not your father’s sales tax.

One of our goals was that Oregon taxpayers — from the lowest earners to the highest — would not pay more in taxes. They would pay different taxes — but not more. The plan would not only be revenue neutral for Oregon taxpayers — it would raise an additional $500 million per year.

That’s because visitors would finally be paying taxes here, and people who don’t report their income would finally be paying their share.

Last month the state Legislative Revenue Office dropped a stunning surprise into this discussion. By using sophisticated computer modeling, economists said the bill would produce more than 50,000 new jobs. Those jobs would come through in-migration and by businesses and employees who will come out ahead with more take-home pay.

Bottom line: No tax increases for Oregonians. More money for education. And a boon to Oregon’s economy. Most significantly, it would end Oregon’s boom-and-bust cycle where teachers are laid off one year, and tax rebates are sent out the next.

It’s hard to explain why elected officials, who always stand up for education and new jobs, shy away from this approach.

Many cling to ancient history: Oregon voters have defeated a sales tax nine times, they remind me. Nine times!

The last vote — 1993 — occurred when the Dow Jones hovered at 3,000 and before most of us had heard of the Internet.

Which brings us back to Linda Nezbeda. She doesn’t share this love/hate relationship with a sales tax. She grew up in sales tax states of New York and California. In the last 20 years, thousands of residents just like her have come from sales tax states to put down roots in Oregon.

Many of these younger families are connected to technology jobs and are more pragmatic than idealistic when it comes to finding a better way to finance education and improve our economy.

Their generation doesn’t seem interested in the ancient history of tax wars. Like me, they’re not even wedded to a sales tax. If there’s a better way to stabilize our tax system and help education, let’s do it.

But instead of looking to the past and coming up with excuses, let’s look to the future and create opportunities.

State Sen. Mark Hass (D-Beaverton) chairs the Senate Education Committee and is a member of the Senate Revenue and Finance Committee.




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