Taking with One Hand, Pointing Fingers with the Other

Around the nation, many states are taking interest-free long-term loans from the federal government to extend unemployment insurance payments. Oregon is not in that position because state law requires its payroll tax rate to adjust automatically to support a healthy balance in its unemployment insurance trust fund.

Many Oregon legislators have taken notice of the federal loans, opining that it is unfair that “responsible” states like Oregon should have to fund less responsible states which did not save enough in their unemployment trust. Perhaps even worse, the federal government is giving states an incentive to continue to keep irresponsibly small savings for unemployment insurance and other programs.

In short, Oregon legislators are angry that the federal government is acting like a bad parent who takes part of the responsible child’s allowance to pay for the bad debts of the reckless child. However, Oregon legislators treat Oregon’s citizens the same way: redistributing wealth in a way that similarly creates incentives against saving and work, hurting the very individuals it intends to help. Even the current structure of unemployment insurance encourages unemployed workers who are receiving benefits to prolong unemployment, as numerous studies have shown. Why don’t Oregon’s legislators apply their criticisms to themselves and consider pursuing policies that will reward hard work and savings instead of discouraging it?

Christina Martin is Director of the Asset Ownership Project at Cascade Policy Institute, Oregon’s free market public policy research organization.

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Posted by at 06:00 | Posted in Measure 37 | 1 Comment |Email This Post Email This Post |Print This Post Print This Post
  • Anonymous

    >Why don’t Oregon’s legislators apply their criticisms to themselves and consider pursuing policies that will reward hard work and savings instead of discouraging it?

    Because that would be antithetical to the entire nature of our tax system as well as our entire system of incentives and disincentives as a society.

    We are one of the few countries that taxes capitol gains, so that’s a big contributing factor in our low savings rate.

    Hard work? Well, if you work really hard you will be punished with higher tax rate while those who chose to work less will be rewarded with low or negative tax rates. If you decide to work really hard, so hard that you start a business and provide jobs for other people, you will then be taxed at a rate 50 – 100% higher than if you worked for someone else.

    Corporate taxes? The US has some of the highest corporate taxes in the world.

    In short, our system is built entirely around the concept of rewarding sloth and punishing thrift and human endeavor. We are about to reiterate that promise with the passage of measure 66 and 67.

    I wouldn’t look for it to change any time soon. With some of the highest unemployment in the country Oregon is about to boost its combined tax rate to among the highest in the world. With that, we have made the decision to eat the seed grain for next year.

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