Yet another Sizemore attempt to make the world safe for the rich and reduce the size of State government to a point at which it could be drowned in a bathtub, Measure 59 would eliminate the cap on the deduction of federal taxes from state income taxes. Let’s say you’re a single person who is lucky enough to make $100,000 per year. You’d expect to pay in the 28% tax bracket for federal taxes and in the 9% tax bracket for your state taxes. Let’s say, for the sake of argument, that you have $15,000 in federal tax liabilities. You’re actually then only being taxed on $94,500 for your state taxes, since the first $5,500 of federal taxes is deductible on your state taxes. If Measure 59 passes, you would only pay state taxes on $85,000 of your income.

In all fairness to racketeer-with-unsatisfied-judgments Sizemore and his rich friends, there’s nothing inherently illogical about their approach. Their philosophy is “you shouldn’t pay taxes on money you’re not getting!” However, the opposing philosophy, that the amount of federal taxes you pay has no logical correlation to the amount you should pay in state taxes, because the State has the right to establish its own tax policy, is equally valid. In typical political fashion, Oregon split the difference and decided that, up to a limit of $5,500, federal taxes would be deductible.

Measure 59 has two flaws: it would result in serious cuts to State government services and it regressively benefits the top 30% of wage earners in Oregon. The State estimates the financial impact of decreased revenues from Measure 59 at about $1.2 billion per year over the long term, or about 14% of the general fund. Effectively, Measure 59 would result in at least a 14% cut in State services, at a time when several counties can’t even fund their mandatory services. (The actual impact would be greater than 14% because of certain federal matching funds that the State would not receive.) The State further estimates that only the top 500,000 wage earners in Oregon will benefit from this tax cut, while 1.3 million taxpayers will receive no benefit. Sizemore, apparently a closet Calvinist, believes that, if you’re poor, you must be stupid enough to vote against your own interests as well, so you’ll vote for Measure 59.

As always, the views expressed here are my personal opinions and do not necessarily represent those of my employer.