ORS 317.057: The Foreign Bank Tax Exemption and Measures 66 and 67

Since when does a democratic government serve its people by threats and coercion?

(EUGENE, Ore.) - “an out-of-state bank, extranational institution or foreign association described in ORS 713.300, that engages in activities authorized under ORS 713.300, is not subject to any tax, license fee or charge for the privilege of doing business in this state”

I have written articles strongly decrying these measures. I have received a great deal of correspondence in regards to these articles, both from supporters and opponents.

Opponents to these taxes who have written to me have primarily been business owners who see these tax increases as a threat to their livelihood.

Supporters of these taxes primarily see them as a way of maintaining essential social services.

I do not believe that supporters and opponents of these measures have any fundamental opposition to each other.

The simple fact is that the legislature has given us a bad piece of legislation, and seeks to threaten us into acquiescence with the threat of cuts to vital social services.

This proposal strains the credulity and the patience of the citizens of this State.

I propose three simple options that would raise revenues many times those proposed by Measures 66 & 67:

The legislature can make whatever legislation it pleases, but if that legislation is submitted to the citizens of this State, then it should be judged on its merit.

How does an elected official and servant of the people have the audacity to threaten their own constituency?

The legislature is actively threatening the people of this State with cuts to education and social services that would cause the people of this State great harm.

Since when does a democratic government serve its people by threats and coercion?

This preposterous situation is made all the more absurd by the manifest injustice of the tax code as it currently stands.

The legislature taxes hard working individuals at a higher rate than corporate shareholders, while exempting foreign banks from taxes entirely.

Bank of America, Citibank, JPMorgan/Chase, and a handful of other New York banks have received tens of billions of dollars in tax payer money. These banks mercilessly exploit every mortgage, credit card, and bank account holder for every last dime of interest and fees that they can squeeze out of them.

The citizens of this State who work and pay taxes on their income have not received any bail outs. They have debts, and their interest rates have been increased. Onerous fees have been assessed.

While the citizens of this State pay taxes, the banks that collect interest from the produce of their labor are exempt from taxation.

Why then should we raise taxes on small businesses in order to pay for our schools and vital social services?

Is it true that the only option the legislature has is to increase taxes and fees on small local businesses, while maintaining tax subsidies for the largest out-of-state corporations? Is it true that we must continue to increase taxes on individuals, increasing the already gaping disparity between individual and corporate taxes?

If the legislature has no better proposals, then perhaps the legislature should listen to its own citizens, or retire. If the legislature does not take that advice, then perhaps they should be fired.

Salem-News.com Business/Economy Reporter Ersun Warncke is a native Oregonian. He has a degree in Economics from Portland State University and studied Law at University of Oregon. At a young age, his career spans a wide variety of fields, from fast food, to union labor, to computer programming. He has published works concerning economics, business, government, and media on blogs for several years. He currently works as an independent software designer specializing in web based applications, open source software, and peer-to-peer (P2P) applications. Ersun describes his writing as being "in the language of the boardroom from the perspective of the shop floor." He adds that "he has no education in journalism other than reading Hunter S. Thompson." But along with life comes the real experience that indeed creates quality writers. Right now, every detail that can help the general public get ahead in life financially, is of paramount importance. You can write to Ersun at: warncke@comcast.net

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Hank Ruark January 18, 2010 4:14 pm (Pacific time)

Ersun: Your last, in last sentence, expressed precisely motivation for many of us...for whom dialog via new/tech has become best possible route for any rational, reasonable work.

Hank Ruark January 18, 2010 3:00 pm (Pacific time)

Friend Ersun: Forgive embroidery to call attention to what the stitching doth do... Agree one hundred percent, based on being on both sides at different times, spending most of career trying to do what was right while often under orders otherwise... Information presentation is essential foundation for every step and style of change process and we neglect it at exquisite danger to democracy. Process involved in any/all budgeting demands deep attention to getting desperately needed full detail, as any Druckerite can demonstrate in deadly depth.

Ersun Warncke January 18, 2010 1:21 pm (Pacific time)

Henry, I do not doubt that the government employees who testified at the public budget hearing I attended were their on orders. I raise this point to illustrate that at the public hearings on the budget, legislatures heard almost exclusively from government beneficiaries, and heard next to nothing from taxpayers. With this in mind, the only representatives of the taxpayers who the legislature likely heard from were paid lobbyists. If these lobbyists are doing their job, then they do not go to the legislature to represent the best interests of the taxpayers generally, but only of the particular taxpayers who they represent. I would ask then: is the legislature truly listening to a broad and representative spectrum of public opinion when they make their decisions? I cannot answer that question with certainty, but based on my own personal experience, and what I know of the political process, my best guess is no. You are certainly right that this condition is indicative of deep and systemic flaws in the democratic process as it is practiced in our society. I am not expecting this to be changed overnight, but I am trying to identify the root causes of these problems both for myself and for others, so that I can see some progress made in regards to them in the course of my life.

Harris January 18, 2010 10:51 am (Pacific time)

I suggest for those people who want the voter to just go along with whatever the state legislature passes and is signed by the governor should start a referendum process to change the state Constitution to throw out the referendum process. Fortunately when that has been tried in the past they quickly found out that the voters did not fall for it. The referendum process is a failsafe for the population to over-rule the legislature when they pass something the people don't want. The voter is the employer, and we are the final decision maker. In a little over a week from now we will see not only who the people believe, but what we want. The referendum process is democracy in action, and the rest is histrionic distractions.

Hank Ruark January 18, 2010 8:09 am (Pacific time)

Ersun et al: Most state workers who appear for budget information are there on orders, with the guidance of supervisors. NO surprise to anyone, but that's pragmatic and also the realistic function they can, should and must perform. HOW well they do so, and with with result, is open in many ways to procedure and the protocol we allow...you are absolutely right to demand a radical change, but do not expect them to reinvent the very wheel they must turn, often vs very strong (and often stupid !) opposition. ONLY documentation: Far too many years involved in this very first step in any possible process of change...

Ersun Warncke January 17, 2010 8:35 pm (Pacific time)

Henry, to clarify the statement on economic forecasting. I was specifically referring to economic projections on the links between tax policy and job creation/destruction, investment activity, or economic growth over time, which are notoriously inaccurate when subjected to objective review, and make assertions that are not based on mathematically valid statistical methodologies. As to the legislature, their facts, and their process of enacting this tax legislation, I would make a couple of points: I attended a public hearing discussing the State's budget issues last spring. Almost every single person who testified (2 exceptions) was a government employee or beneficiary of a government program who had been brought to testify by a government employee. Every single person asked for full funding of their programs, and not a single person offered any suggestions for raising revenues. Many of these people were being paid government salaries to be there. That is my personal experience with the legislature's budget planning process. When it comes to facts, perhaps you should consider the fact that general fund revenue is projected to be $14 billion for 2009-2011. The general fund budget for 2007-2009 was $15.1 billion, a 21% increase over the $12.5 billion budget for 2005-2007. As I recall, 2005-2007 wasn't particularly apocalyptic, and somehow the State managed to function on $12.5 billion, so assertions that a cut from $15.1 to $14 billion would signal a return to the stone age seem somewhat melodramatic. The Government's budget grew dramatically in years of an artificial stock/real estate/credit driven boom. Trying to maintain the spending levels from the peak years of that boom in a time of serious bust is not necessarily the best option. As a final note on the legislature's candor, I will point out that they always have the option of reconvening if these measures are rejected. They can say that if these measures are rejected, calamity will follow, but that calamity will be of their own making. You ask me what is fair and just, which requires some repetition on my part: Make individual and corporate tax rates the same. If you are going to do a gross revenue/sales tax, don't cap it, so that it applies equally to businesses of all sizes. Eliminate at least some of the tax subsidies for corporations.

Hank Ruark January 17, 2010 3:30 pm (Pacific time)

Friend Ersun: You wrote:"...not some imaginary story about future economic conditions. I also see no reason to be swayed by the propaganda on either side of the issue, which is totally irrelevant to the substance of the legislation." What was it you stated re economics conclusions ? Do you contend that facts given Legislature re consequences were "irrelevant" when agencies then issued lists of first and succeeding choices to cut varying percent from every budget ? More "arrogant, threatening" behavior, sir ? Or simple common sense in pragmatic preparation for consequences, and then-unavoidable impacts ? You state you prefer policy made "by fair and just" means, yet you refuse to accept those Legislators chose after very deep, continuing, both-sides discussion and then final decision, facing voters all the way, with early word in June. So that leaves you with full responsibility to state what is "fair and reasonable" to you as economist...unless you class yourself right along with those you so easily now denigrate. FYI, propaganda is never irrelevant, not only for its own impact but for the clear mirror it manipulates to make brightly illuminated what its perpetrators are seeking to accomplish --see my Op Ed re Californication"...

Hank Ruark January 17, 2010 2:09 pm (Pacific time)

Friend Ersun:
Happens I agree about 90 percent with your reading of economic necessities yet to come.

BUT we have thousands of kids now in school, thousands of youth seeking college but barred by costs, thousands of other youth and many adults seeking some desperate means to build skills for new jobs as they emerge, via community college retraining.

Then,too, there is that very tattered partial-survival net now offered far too many other thousands captured in colossal failure of current economy,not their fault but they are still starving, many homeless, more facing facts of such failures every day, including those who MUST have help mentally OR ELSE we face horrendous other consequences, esp. as closed prisons release their inmates and elderly lose essential support.

Given all fully insuperable, insufferable facts, all fancy for full, radical reform NOW must collapse in moral and ethical demand to deal in only pragmatic manner possible in midst of such impossibilities --practical first steps while we contemplate and then again courageously complete what the Legislature has set out to do, rationally and reasonably most Oregonians will understand.

In a speech last week, Senate President Peter Courtney said lawmakers agonized for a lot longer about how to close the gap between plummeting tax collections, which he called "staggering," and maintaining schools, human services and public safety. He said lawmakers did so mostly through cutting projected spending, shifting some funds, and tapping federal economic-recovery funds of $1 billion — and the rest through new taxes.

"I cannot account for what is in headlines, articles and editorials," the Salem Democrat said. "If you do not believe me, you do not have to believe me. But the agony we went through to get to these decisions — and to what may happen after the 26th if these measures fail — is beyond description. This is not fun and games."

THIS in no arrogant obnoxious politician presenting impotent excuse, but a tested, proven political leader faced with near-impossible responsibility seeking to carry out his duty to the full...anyone who knows Courtney cannot but agree !!

Others may act radically and they will then reap the rising costs in their own professional careers.

Policy, first and foremost, for every possible good reason in management, ethics, morals and any religious faith, must first and always deal with the human elements it impacts.
That is professional principle prominent, foremost in many, found wherever one doth seek in solid sources not questionable by anyone today.

We have our choice here, and we must do what is right.
Support 66 & 67 for right action rapidly, beginning the reform we must also manage more slowly and continuously for at least ten years...

SEVENTY YEARS OF NEGLECT HAS ITS HUGE COST AND CONSEQUENCES

Ersun Warncke January 17, 2010 12:11 pm (Pacific time)

francfist, I agree with you completely. I am generally turned off by anyone who is spending millions of dollars on propaganda to try and push their own agenda instead of using their resources for something with an actual purpose and benefit. Make no mistake, the people paying for the campaigns against these measures have a very different policy objective in mind than I do. I would like these measures to be rejected, so that they can be replaced with legislation that actually eliminates the tax subsidies and unfair advantages held by the people who are financing the paid opposition. As an economist, I know that most of these job projections and economic forecasts are complete b.s. with no scientific basis whatsoever. Consequently, I would rather make policy on the basis of what is fair and just, not some imaginary story about future economic conditions. I also see no reason to be swayed by the propaganda on either side of the issue, which is totally irrelevant to the substance of the legislation. As a voter on a referendum, I am charged with making policy, and so that is the criteria I use.

francfist January 16, 2010 5:20 pm (Pacific time)

I personally was turned off by the proponents of this bill who seemed to be threatening the loss of jobs if these measures passed. Is that much different from what this writer says the legislature is doing? I find myself angered when promised jobs or threatened with less jobs. I listened for year after year as politicians said big tax breaks were necessary for these companies so they could "create" jobs. I look around at the millions of jobless Americans and think, if business wants to use jobs as a carrot to gain votes on one side or the other....they should make sure the carrot (jobs) are real. I have no job though I would like one, the threat of less of something I already have zero of makes no big impression on me except for inspiring anger.

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