Oregon voters took a huge step on January 26 to stem the $727 million state budget shortfall that would have otherwise led to massive reductions in social services and education. This was a huge about face for voters who previously the last several years rejected two proposed tax increases. In fact, taxes have not been raised in the state since the 1930s. It is also one of only five states without a sales tax.
So, it is not without reason that Oregon is often labeled as an anti-tax state.
This time, however, voters reversed gears and approved tax hikes for those making over $250,000 a year, three percent of the population; raised the minimum corporate tax from its current $10 minimum which has been in effect since 1931, and raised taxes on high-end corporate profits.
This will more than cover the budget deficit without raising taxes paid by the overwhelming majority of people.
Oregon Education Association union President Gail Rasmussen said on the union’s web site, "Oregon voters took a stand against more four-day school weeks and bulging class sizes and said yes to corporations and the wealthy paying their fair share."
Why can’t we do this in California which is suffering a $6 billion shortfall and where the governor proposes absolutely no new tax revenues? Good Question!
Reacting to steps taken by Oregon voters, the San Francisco Labor Council said “That is why we are urging that California enact a program of progressive taxation. This could ensure that all our communities can thrive. And, at the same time, we could establish fully funded social services and job security for public workers.”
Governor Schwarzenegger’s alternative is to propose cutting education by $2.4 billion, health by $2.9 billion and state workers by $1.6 billion. Yet, California already ranks 45th lowest on education spending for kids in the classroom. What is he thinking?
The California Labor Federation, AFL-CIO, sees it differently. “Each year, California gives away more than $50 billion in tax breaks to individuals and wealthy corporations. If we close just some of these tax loopholes, we can protect public safety and maintain lifesaving programs for some of the state’s most vulnerable residents.”
One example of letting corporations off the hook is that California is the only oil-producing state that does not tax oil that is owned, leased, or extracted from private lands. Making oil companies pay what other states require would alone raise $1 billion a year.
There is a big debate occurring throughout America on how to solve the country’s financial problems. Oregon voters are the first to point the way in a different direction; forget about Wall St. for a second and begin paying attention to the rest of us.