Democrats to the Poor: Let Them Eat Cake But Tax it First

Right From the Start

When it comes to choosing between the well-being of the public employees unions and raising taxes on Oregonians with limited incomes, where do the loyalties of Oregon’s Democrat Party lie? No, it’s not a trick question; it’s just an obvious one.

Oregon’s state general fund budget is $3.5 Billion short. Not really, but those that believe in the primacy of government like to use that figure to scare the beejeezus out of the citizenry in an effort to raise even more taxes. The fact of the matter is that the alleged shortfall is composed of $1.3 Billion of increased spending, another $1.0 Billion from a hiring binge of public employees by former Gov. Ted Kulongoski (6,200 additional employees, an increase of nearly thirty-seven percent) and the balance (actually more than the balance) in increased benefit costs (healthcare and PERS) for the remaining employees. Not exactly a fiscal crises unless, of course, you are a public employee union executive or a Democrat dependent on the $80 Million biennial war chest of the public employee unions to finance your campaign.

And all the while these Democrats are enriching the public employee unions so as to feed from the unions campaign trough, they are wringing their hands over the plight of the children, the poor, the sick and the elderly as justification for raising more taxes. They never acknowledge that of the last tax increase they sponsored, Measures 66 and 67, which was to raise over $735 Million virtually every dime of it was used to increase the number of public employees, give raises to the public employees and increase the state’s contributions to the public employees generous healthcare benefits and gold-platted PERS pension plan.

The children, the poor, the sick and the elderly got nothing from the last tax increase and this time around they will get even less. That’s right because this time around the Democrats want to tax the poor in order to sustain their obligation to the public employees unions.

There are at least five measures pending before the legislature that are a sneak attack of the welfare of the poorest of Oregon’s citizens. House Bill 2518, introduced by the Democrat controlled interim Committee on Revenue, seeks to impose a tax on the transfer of real estate. House Bill 2237, introduced by the Democrat controlled interim Committee on Human Resources, seeks to increase taxes on cigarettes. House Bill 2644, introduced by Democrat Rep. Mitch Greenlick, seeks to tax soda pop. And House Bill 3262, introduced the split House Revenue Committee (yes, there are some Republicans that don’t seem to understand taxation either) seeks to increase taxes on beer..

And what do those measures have to do with the poor?

For many Oregonians their home is the largest single asset they possess. Payment of a mortgage over twenty-five or thirty years becomes their de facto savings account for later years. Taxing the transfer of real estate, while mathematically equal, has a disproportionate effect on the poor because it extracts a greater portion of their margin wealth.

According to an article published in June of 2010 in the Huffington Post by Stanton Peele, an addiction expert, poor people drink more soda pop and smoke more cigarettes and thus any increase taxes on cigarettes and soda pop fall disproportionally on them. Not only in sheer volume of use, but also in its effect on a substantially smaller amount of disposable income.

The Center for Science in the Public Interest, not exactly a conservative research body, published a report in support of an increase in beer taxes. Unfortunately, the researchers apparently failed to understand their own statistics. The report notes that while alcohol consumption remains, as a percent of income, relatively constant across economic groups”

“Moreover, lower income people consume less alcohol than wealthier consumers, and drinking is more highly concentrated among a small subgroup of heavy drinking lower income consumers. For example, the 20% of low income consumers with the highest expenditures for alcohol account for 82% of all alcohol expenditures within the low income cohort.”


Said the correct way is that 82 percent of all alcohol expenditures in the low-income group are made by twenty percent of the group. Increases in taxes will fall disproportionately on this subset of low-income families.

Add to those measures, Gov. Kitzhaber’s proposal to impose a tax on cell phones and another proposal to increase utility taxes and you can see that there is a full-fledged assault on the lower end of the economic strata of Oregon. Before you get all huffy about Kitzhaber’s cell phone tax being used to fund improvements for state police communications understand that is simply a diversion of an obligation of the general fund in order to free revenue for the principle priorities of government – public employee numbers, salaries and benefits. And the same can be said of the tax on utilities to fund “green projects.” For those forced to endure an education in Portland’s public schools, please note that businesses don’t pay taxes, their consumers do in the form of increased prices.

And so you ask why are the Democrats going after the lower strata of incomes? Well, because the results of the tax increases on business under Measures 66 produced exactly what the opponents said would happen – a decrease in taxable business income with the result that is produced about $50 Million or twenty-eight percent less than it was projected to raise. Any additional tax on business will have comparable effects in decreasing the amount o taxable income.

Since you’re a Democrat and reducing expenditures for the number of employees, their salaries and their benefits is an anathema to your campaign financial arm – the public employee unions – your only alternative is to increase taxes to a segment of the population that stands with a relatively small voice in public affairs – the low income population. And even then, you, as a Democrat, cannot be square about it and just raise their taxes – you have to raise taxes on products they consume and for which they must bear a disproportionate burden.

Yes, the question was too obvious. If you are a Democrat you care more about the public employee unions that you do about the children, the poor, the sick and the elderly. You have to or you won’t have any campaign funds.

Is this an oversimplification? Yes. Is it still true? Absolutely.