Oregon Proposal: Stop Kicking Folks When They’re Down (AUDIO)

"It could help keep some families from having to go the food bank for one more week. It could keep gas in the car, could help somebody pay their phone bill and get that next job." - Duke Shepard, political director for the Oregon AFL-CIO

(PORTLAND, Ore. ONS) - Every dollar counts for the thousands of Oregonians who have lost their jobs, and one legislative proposal would exempt the first $2400 in unemployment benefits from state income taxes.

It's a tax break already in place for federal income taxes. District 2 State Senator Jason Atkinson (R-Central Point) is the sponsor of SB 975.

"Look, this is the wrong thing to do, tax somebody while they're down, and my bill simply eliminates taxation on unemployment benefits."

Sen. Atkinson and backers of the bill, including the Oregon AFL-CIO, are asking that it be scheduled for a hearing soon. They're concerned the legislature could run out of time to consider the proposal as the session winds down next month.

Duke Shepard, political director for the Oregon AFL-CIO, says low- to moderate-income families would see about $150 more in their pockets if the bill is passed.

"It could help keep some families from having to go the food bank for one more week. It could keep gas in the car, could help somebody pay their phone bill and get that next job."

At 12 percent, Oregon's unemployment rate is the second highest in the country; only Michigan, at 12.9 percent, is higher. Opponents of SB 975 are concerned about the potential impact on state coffers; supporters claim it is minimal and point out that benefits beyond the $2400 mark would be taxed as usual.

Special thanks to Oregon News Service for this report
Reporter: Deborah Smith
Producer: Deb Courson

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Anonymous May 26, 2009 6:03 pm (Pacific time)

Unemployment benfits are paid by employers, at least until possible fed dollars kick in during extended benefit periods. These benefits use to be tax free. So were the tips people in the food and beverage industry got. Those taxes are patently unfair, especially from people who generally have no sick leave, vacation time, actually few bennies, and many work split shifts so they have higher transportation costs, and on and on. So who do you think is behind taxing these people? Well it's the same people who always tax and fee us to death and never have enough money, so they continue to find new taxes and fees even during recessions. California finally hit the "tax wall", so yes it is the democrats who do this tax and fee in a never ending pursuit to totally bankrupt us.

Scott May 26, 2009 12:11 pm (Pacific time)

I don't know much about this topic of unemployment benefits, but I have a couple initial thoughts after reading this article. First, I wonder if the money paid in unemployment benefits has already been taxed once (when it was earned by a taxpayer). I suspect it was deducted "pre-tax" from the paycheck. Second, is there anything in the works to give a tax break to working folks? Or how about to employers? Thanks.

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