The Other Side of Volatility

In their quest for new taxes on business Oregon Democrats are making the argument that Oregon’s current tax system is very volatile.  Now they may have a point, Oregon’s tax code relies very heavily on personal income taxes, so during bad economic times where there is high unemployment and lower wages, Oregon’s tax revenues are hit quite hard compared to other states in the union.  That being said, the other side of the volatility coin is that Oregon during good economic times with low unemployment Oregon tax revenues go gangbusters.

Since the end of the recession Oregon tax revenues have rebounded by 32.7% according to and analysis by the Pew Charitable Trusts. In fact Oregon lead every other state in the union in tax revenue increases.  So is does Oregon have a volatile tax system? You bet, but right now in a good year that we should be living high on the hog and preparing for a cyclical downturn that will inevitably arrive, our record revenues are STILL not enough to meet the spending obligation set out before us.

While the trade offs in the volatility in Oregon’s tax structure are absolutely something worth having a public policy discussion about, but it seems that many Democrats are using this legitimate critique of Oregon’s tax code to cloak a substantial increase in taxes.

It seems like there could be some good faith efforts to have real conversation about how Oregon should set up it’s tax structure, but they appear to be being drowned out by blatant efforts to extract more and more dollars from our economy in the form of taxes.

Oregon does have a serious structural problem, but it is a structural spending problem.  The rates at which PERS and Medicaid costs are growing at an unsustainable rate to the point that even the record revenues we are currently seeing in this healthier economy are not enough to close the gap.
As a millennial, growing up I would often hear “do your best, that is all that matters” to which the sterner members of my family would say “Sometimes even your best isn’t enough.” Well now Oregon’s economy is doing it’s best by producing more revenue than the state has ever seen before, but because of the spending structure our leaders have put in place, our best is unfortunately not enough.

Jacob Vandever is political activist, lifelong Oregonian, and proud Oregon State graduate. Jacob is the Editor of the Oregon Upstart Blog.