Oregon Center for Public Policy: A Step Toward Balance: Measures 66 and 67 Move Oregon Closer to a Tax System Based on Ability to Pay
ITEP Work in ActionToday, low-income Oregonians pay a larger share of their income in state and local taxes than wealthy Oregonians. In fact, the highest-income Oregonians pay the lowest share of their income in state and local taxes. In addition to raising needed revenue, Measures 66 and 67 begin to address this imbalance.
Facing a revenue crisis brought on by the recession, the 2009 Legislative Assembly enacted two measures that will raise $733 million in new revenue in the 2009-11 biennium.[1] The modest tax increases on corporations and wealthy Oregonians helped avoid deeper cuts in education, health and human services and public safety than those already made to address a projected $4 billion shortfall in General Fund revenues.
One well-established principle for judging a tax system is whether revenues are raised based on the ability of taxpayers to pay the taxes.[2] Oregon’s tax system — all state and local taxes combined — currently fails that test, but the two revenue measures enacted by the 2009 legislature take Oregon one step closer to having a tax system based on ability to pay.