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Nov-30-2009 11:13printcomments

Group Stands by Economic Analysis of Job Losses due to Measures 66 and 67

Cascade Policy Institute offers rebuttal to recent article from the Oregon Center for Public Policy.


(PORTLAND, Ore.) - The Cascade Policy Institute has written a direct response to an article published on, Nov-24-2009, titled Experts Debunk Claim That Tax Measures Would Cost Jobs.

Supporters of higher taxes in Oregon are desperate to debunk the overwhelming economic logic that the personal and corporate income tax increases in Measures 66 and 67 on the January ballot will result in tens of thousands of job losses.

Oregon Center for Public Policy asked economists at the Tax Policy Center in Washington D.C. to challenge the analysis of two prominent Oregon economists, Bill Conerly and Randall Pozdena, which find that some 70,000 jobs will be lost if the two tax measures go into effect.

The Tax Policy Center economists, Roseanne Altshuler and Kim Rueben, came out with a four-page analysis attempting to discredit Conerly and Pozdena’s work. But even in trying to do so, Altshuler and Rueben admit that “…the corporate income tax (and personal income tax) may place a drag on the economy…” and they go on to state that “…the lack of a retail or wholesale sales tax in Oregon tends to encourage productive activity.”

In making the statements above, these critics confirm two of Conerly and Pozdena’s key assumptions:

1. Increased taxes have detrimental effects on the economy.

2. Reducing tax liability improves productivity.

In responding to the Tax Policy Center authors, Bill Conerly noted that their criticism of his current work relied on differences the Center had with another analysis he did on another tax four years ago. Nothing in the Center’s report dealt with his current analysis, which found that some 30,000 jobs will be lost if Measure 66, the personal income tax increase, goes into effect.

Randall Pozdena noted that the Center criticized his analysis of 40,000 job losses from Measure 67, the corporate tax increase, by faulting his reliance on a study which included non-industrial countries. Yet the same type of study, performed on ONLY industrialized countries by the OECD, reached the same conclusion as Pozdena and Conerly: "Corporate taxes are found to be most harmful for growth, followed by personal income taxes..."

Furthermore, Pozdena stated in his original analysis that, although his estimates are derived using studies based on country comparisons, tax competition among states is likely higher than among countries, resulting in greater leakage of jobs to the states that tax corporate incomes at lower rates.

Cascade Senior Policy Analyst Steve Buckstein welcomed the scrutiny of his institute’s work. “As tax proponents have stated, the stakes are very high in this election.”

“I’m glad to see that even the Tax Policy Center economists agree with Cascade’s economists that higher taxes can place a drag on the economy,” Buckstein said. “The only question now is how much of a drag these new taxes will place on Oregon’s already dragging economy.”

“If 70,000 Oregonians who have jobs now lose them because of these tax measures, or if 70,000 Oregonians looking for work can’t find it because of these measures, I’m confident that Oregon voters will see that as too high a price to pay, and will vote NO on Measures 66 and 67 in January.”

Relevant documents:

* Examination of Oregon’s Proposal to Raise the Top Corporate Tax Rate and Top Personal Income Tax Rates
Tax Policy Center, Roseanne Altshuler and Kim Rueben * Taxing the “Wealthy” More Will Cost 36,000 Oregon Jobs
by William Conerly, Ph.D.

* Raising Oregon’s Corporate Income Tax Rate Will Cost 43,000 Oregon Jobs
by Randall Pozdena, Ph.D.

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Oregon Reader November 30, 2009 7:58 pm (Pacific time)

I, for one, believe that the free market can better invest (and spend) than the government. If we could find market mechanisms to perform more services that government provides, that would be my first choice. That being said, I don't see how the tax measures are going to add up to enough to be much of a drag on the economy. Government continues to under perform in its delivery of services. Same old story. I was hopeful that the book "Reinventing Government" and the push for reform under Clinton would have had lasting impact. If it did, we would not need to be talking about new taxes, would we?!

ThinkOregon November 30, 2009 4:19 pm (Pacific time)

I'd add there is another important factor to consider in the Measure 66 and 67 debate: The State Of Oregon's Budget Growth Versus Population Growth which we cover here...

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