Building an Economy that Works for Everyone

Oregon looks to high road economic development — will Washington?

According to the Oregonian, Oregon House Democrats are proposing to fix part of the state’s budget crisis by increasing taxes on corporations and adding a new, higher tax bracket on households making more than $250,000 a year.

Comments on the Oregonian story mostly offer more of the usual scare tactics about business and wealthy individuals moving out of the state — to Washington, no less! Maybe the only fair thing to do is make sure Washington’s income tax is at least as high as Oregon’s, just so there’s a level playing field.

Kidding aside, it takes a very flexible imagination to seriously entertain the notion that the *only* reason people move or live anywhere is for low taxes, and not clean air, good parks and schools, reliable transportation, or any of the other public structures supported by our tax dollars. Would that many people really pick up and move their entire lives — families, businesses, etc. — to Alaska, or Florida, Nevada,South Dakota, Texas or Wyoming, just to save a few bucks if Washington passed an income tax? Seems doubtful.

But even if a few did, we’d attract all sorts of new businesses and families interested in moving here (and paying those taxes) for an educated workforce and a high quality of life. We’d be together on the high road toward having a better state to live and do business in, instead of being in some “race to the bottom” economic competition that no one will win.

The Oregon legislators say their proposed tax increases would bring in $500 million to fill Oregon’s current $4 billion dollar budget shortfall. The balance would be made up by $1.5-$2 billion in budget cuts, plus some spending from reserves and federal stimulus dollars.

That sure seems a lot more palatable than Washington’s all-cuts budget. I wonder whether Washington voters would feel the same way if given a chance to vote on it? The two states have different political climates, certainly. But Oregon’s ballot initiative activist Bill Sizemore (to whom Washington’s Tim Eyman is sometime compared) says voters there would support it:

It’s useless for conservatives to wage what he predicts would be an unsuccessful effort to repeal Democratic tax increases, he said.

“Oregon voters are quite conservative when it comes to broad-based taxes that affect most taxpayers,” he wrote in a blog post. “Give them a chance to tax the ‘wealthy,’ and they will likely do so.”

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