New Study Finds Most Oregonians Pay For Federal Tax Cuts That Only Benefit the Rich

Under the current design, only the wealthiest Oregonians, those with an average annual income of almost $1 million, are winners.

(SILVERTON) - A new report finds that all but the wealthiest Oregonians will be worse off because of tax cuts enacted by Congress at the behest of the Bush Administration. The study, by the non-partisan Citizens for Tax Justice, analyzes the net impact on Oregonians at various income levels of deficit- financed tax reductions approved over the last six years.

“This report gives Oregonians compelling reason to insist on significant changes in our federal tax policy,” said Janet Bauer, policy analyst with the Oregon Center for Public Policy, a public policy research institute based in Silverton. “Since only extremely wealthy Oregonians will see a net gain from the tax cuts, most Oregonians should be concerned that they are helping to pay for tax cuts from which they ultimately do not benefit,” she added.

Since 2001, Congress has approved a host of Administration-sponsored tax cuts that include capital gains and dividends tax breaks, reductions in personal income tax rates, cuts in the federal estate tax, and expansion of the number and nature of corporate tax loopholes. These tax cuts have been primarily paid for with borrowed funds, increasing the national debt. The report, The Bush Tax Cuts: Are Oregonians Better Off?, quantifies the cost to taxpayers of repaying the borrowed funds.

The report finds that Oregonians at all income levels except the top one percent are expected to suffer an average net loss of about $7,200 per person due to the fiscal policies in place between 2001 and 2006. Put another way, for 99 percent of Oregonians, the added debt they incur exceeds the tax cut benefits. This finding is based on an accounting of tax benefits accrued at various income levels from 2001 to 2006, minus a share of the debt that has accumulated over the period as a result of the tax cuts.

Only the wealthiest Oregonians, those with an average annual income of almost $1 million, are winners. The Citizens for Tax Justice study finds that if just the net tax benefits over the last five years are considered, Oregonians in the top 1 percent income group – those with an average annual income of $967,000 – will realize an average net benefit of $20,000 per person.

The study also looked at the 10-year impact of the tax cuts. Over the decade of 2001-2010, a disproportionate share of the tax benefits – about 29 percent of the benefits – go to the wealthiest one percent of Oregonians, and they receive an average annual tax cut of $33,800. By contrast, the poorest 60 percent of Oregonians get only just 20 percent of the benefits of the tax cuts, with an average annual tax cut of only $382

“The tax cuts don’t pay for themselves, and all but the most fortunate among us are saddled with the bill at the end of the day,” said Bauer. “Fortunately, many of the tax cuts expire in 2010, so we have an opportunity to put an end to these fiscally irresponsible policies that burden Oregonians,” she added.

The Oregon Center for Public Policy uses research and analysis to advance policies and practices that improve the economic and social opportunities of all Oregonians.

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Henry Ruark October 23, 2006 1:30 pm (Pacific time)

Anon-again: Forgot to suggest you see ref. given to John for Palley-book below. Death to middle class and how being accomplished spelled out in detail there by world-famed economist, who knows a deficit when it bites his friends and family.

Henry Ruark October 22, 2006 9:35 pm (Pacific time)

Anon: Used term debits since many economists classify deficits in that category. Re time am already winner at 88, so can gamble a bit with what may help others. Re real study on allathis, send ID and emailer to Tim and I'll give you whole list of references and be glad to receive yours. Your comment suggests "supply side" but as if understood in wrong usage.

Anonymous October 22, 2006 6:19 pm (Pacific time)

I've been outed as a debt heretic. I see that questioning common knowledge regarding debt is frowned upon by you. Maybe you should answer the questions posed here (Deficits and the national debt: The two toughest questions of all) I am a little concerned that since you consider my post such a waste of "space, time, attention and print" that you would waste your precious time and attention responding to it. You do know that you'll never get that time back.

Henry Ruark October 22, 2006 2:17 am (Pacific time)

Last-Anon: Since you neither qualify yourself or document this statement, it is selfdefeating. ID-with-your background to comment or supply reference for it. Otherwise meaningless, wasted space, time, attention and print. Taken at face value it is open support for falsity that "debits mean nothing", which sickens anyone with understandings and misleads much governance-now --which is why Clinton-era national figure now negated with many billions owed at destructive interest costs.

Anonymous October 21, 2006 8:54 pm (Pacific time)

The per person share of debt number assumes that the total amount of debt will have to be reduced to zero at some point in the future. You don't need to be an economist to question that assumption.

Henry Ruark October 21, 2006 1:01 pm (Pacific time)

Al: Thanks for reminder re Saxton intent to cut taxes wherever he can get away with it on income from capital gains and on inheritance and similar...while avoiding anything like demanded action to offset heavy shift from corporate payment of tax burden to the individual Oregonian. See OCPP for full documentation.

Henry Ruark October 21, 2006 9:24 am (Pacific time)

John et al: Found reference for statement-made: "Plenty of Nothing"; Thomas Palley;Princeton U. Press; 1998;ISBN 0-691-04847-9. Subtitled: "The Downsizing of the American Dream and the Case for Structural Keynesiasm:. Palley is AFL-CIO Public Policy guru. He'll set you straight on this issue if ypu seek factual background.

Albert Marnell October 21, 2006 7:33 am (Pacific time)

If I make a billion dollars a year, the federal government can take half. If I make 120,000 I deeply resent that they take about a third of my income leaving me with about 80,000. Then I have to pay state tax, property tax, sales tax, phone tax, etc. What in the hell is left for me and I am supposed to save for retirement?

Henry Ruark October 21, 2006 12:06 am (Pacific time)

John: You hold an economist's advanced-training degree ? We know not who ye be... Re "meaningless", perhaps to you, but surely not to those defrauded by deep departures from decently-designed tax principle, putting larger share of burden on those squeezing much more out of commonweal enterprise --which most economists agree comes from cooperative efforts such as building productivity by worker effort, as well as by capital provision by those getting it by whatever means.

John October 20, 2006 7:28 pm (Pacific time)

The per person share of debt is meaningless. According to the CBO, the bottom 20% of taxpayers pay 1% of federal taxes. The middle 20% of taxpayers pay 10% of federal taxes. The top 20% pay 66% of federal taxes. (Historical Shares of Federal Tax Liabilities for All Households) Debt is paid with tax revenue, so the share of the debt paid would equal the share of taxes paid, tax cuts or no tax cuts. In fact, the 2001 and 2003 tax cuts increased the share of the tax burden for those making over $100,000 while decreasing it for everyone else.(New IRS Data: Tax Code More Progressive in 2004 than in 2000)

Albert Marnell October 20, 2006 6:54 pm (Pacific time)

A large percentage of your Federal Tax goes to the Federal Reserve (privately owned) for interest on the National Debt. Bankers everywhere stealing left and right with the blessings of our government and military. Time for a revolution! The military will start to catch on and free us from the top thieves (I HOPE). Global Bankers Rule all. But it has gone too far. How about a Boston Tea Party?

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