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Looking for tax value and accountability in government

With income tax returns due next month, nearly all Oregonians will utilize credits and deductions to reduce tax bills and pay for essential food, medical, and housing costs. The governor and Legislature, now controlled by Democrats, are considering cutting, eliminating, and capping some tax deductions and credits to help fund the next budget. Many Oregonians, already facing higher federal taxes, could also see higher state tax bills. But far from being a boon to the rich, our tax relief policies help struggling Oregonians, small business owners, and middle class families.

In light of these discussions, I hope my friends across the aisle will remember a few facts. First, Oregonians demand value for our tax dollars and accountability in our institutions. This isn’t about generic “waste and fraud.” This is about your teachers, police officers, and basic services. Until the Legislature gets serious about reforms to our Public Employee Retirement System, more revenue isn’t the answer. As a local school district budget officer told me, without changes in PERS, the average student-to-teacher ratio in his district will increase from 27 to 34 students per teacher, and class sizes in high schools could average 44 students per teacher.

Second, let’s remember that Oregonians are struggling to sustain a slow recovery. Economists remind us that raising taxes during recovery can start another recession.

Third, state economists report Oregon’s revenues will already grow by 10.5 percent, or $1.5 billion, in the next biennium — with zero changes in our tax system. And keep in mind that our state’s budget has nearly doubled in the past decade, exceeding population and inflation growth.

Fourth, Oregonians already struggle under some of the highest income taxes, capital gains taxes, estate taxes, and fees in the nation. We rank fifth highest in America for per-taxpayer income tax burden, yet proposals have already been advanced to eliminate relief for seniors, cap total deductions and credits, and complicate our tax forms and filings even more by disconnecting from federal law.

Now, I think it’s appropriate and essential to examine tax credits and deduction on a regular basis. Republicans supported legislation to review and eliminate tax credits that were flawed, and we work closely with Democrats to revise tax statutes that aren’t working as intended. However, everyone must acknowledge that most taxpayers — poor, middle class and wealthy — benefit from credits and deductions, and Oregonians won’t support tax increases until they are confident tax dollars are being spent wisely.

Without serious PERS and regulatory reforms, higher taxes should be the last point of discussion. In this respect I laud the Governor’s efforts to seek sensible reforms in PERS, health care, and public safety, but we must work together to implement these reforms first.

Finally, I remind my colleagues that our efforts need to be laser-focused on helping our poor and unemployed, and enabling our small businesses and entrepreneurs to succeed so they can thrive and hire in Oregon.

Rep. John Davis is a member of the House Revenue Committee. He represents House District 26, covering Wilsonville, Sherwood, King City and Hillsboro.




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