Daniel Morris, MS, PhD

Transcription

1 Daniel Morris, MS, PhD

2 Our Oregon is Oregon s progressive coalition, working for social and economic justice and fighting to protect Oregon s priorities.

3 Education 2 nd largest K-12 class sizes in the country One of the shortest school years University tuitions increasing ~3x faster than inflation

4 Transportation ¼ of the states bridges are either structurally deficient or functionally obsolete American Society of Civil Engineers

5 Public services Over 1/3 of the state s population received food stamps in 2013 Oregon Health Authority

6 Pop Quiz! 1. What share of personal income in Oregon is claimed by the Top 1%? 16% 1. What share of income gains in Oregon between 2011 and 2012 went to the Top 1%? $3.4 billion (56%) 2. How much larger is the income of the Top 1% of the Top 1% than the median taxpayer s income? 500 times larger ($17.7M vs $35k) 3. What are the average tax deductions taken by the bottom 99% and the Top 1% of the Top 1%? $8,300 vs $2.2M

7 What I want to cover today Winners and losers in Oregon s economy Oregon s tax system What we can do about it

8 Oregon s economy has outpaced the U.S. economy Oregon Center for Public Policy

9 Economic gains have gone to boost corporate profits % OF OREGON GSP 60% Gross operating 50% 40% Employee compensation 30% Bureau of Economic Analysis, GDP data

10 Changes in wages in Oregon 8% 6% 4% 2% 0% -2% -4% -6% -8% Change in hourly wages by percentile of wages, , adjusted for inflation 10th 25th 50th 75th 90th Calculations based on Bureau of Labor Statistics Occupational Employment Survey

11 For most families real income has declined 30% 27% 20% % difference in real income between 2002 and % 0% % -20% -30% Percentile of income Oregon Department of Revenue, adjusted gross income for full-year filers, adjusted for inflation

12 The Top 1% (And the Top 0.01%) $18,000,000 $900,000 $16,000,000 $800,000 $14,000,000 $700,000 $12,000,000 $600,000 $10,000,000 $500,000 $8,000,000 $400,000 $6,000,000 $300,000 $4,000,000 $200,000 $2,000,000 $100,000 $-$0 Average Adjusted Gross Income Percentile of income Oregon Department of Revenue, average adjusted gross income for full-year filers, 2012

13 Most of the Income Going to the Wealthiest People is Unearned 100% 90% 80% Earned income Business income Unearned income 4% 7% 25% 70% 60% 30% 66% 50% 40% 90% 30% 20% 46% 26% 10% 0% Bottom 99% Bottom 99% of the top 1% 9% Top 1% of the top 1% Oregon Department of Revenue 2012

14 Who owns all the corporate stock? Bottom 90% owns 10% Corporate profits in billions, 2013 $ $2,000 1 $1, $1, $1, $1, Top 1% owns 52% 90-99% owns 38% $1,000 $800 $600 $400 $ $- 0 Survey of Consumer Finances, 2007 Corporate profits after tax, adjusted for inflation to 2013 $, with recessions. Federal Reserve Bank of St. Louis

15 How do corporations boost profits?

16 Outsourcing jobs Wall Street Journal

17 Based on a study in Wisconsin, reported by the Democratic staff of the U.S. House Committee on Education and the Workforce. The Low-Wage Drag on Our Economy (2013)

18 Lobby for tax breaks and deregulation Finance/Insurance/Real Estate Health Misc Business Communications/Electronics Energy/Natural Resources Transportation Other Agribusiness Ideology/Single-Issue Defense Construction Labor Opensecrets.org $49 $47 $223 $243 $152 $147 $135 $490 $485 $484 $394 $359 Million $3.24 billion spent lobbying Congress and Federal agencies in 2013

19 Dodging taxes: $2 Trillion in offshored profits CUT LABOR COSTS DODGE TAXES LOBBY FOR BREAKS AND LESS REGULATION Stock Buybacks aphics/ /offshoreprofits-avoid-irs-reach.html

20 Summary A system that maximizes corporate profits for the benefit of the Top 1% An economy that doesn t work for most Oregonians A need for significant investment in education, infrastructure and public services

21 Oregon s tax system

22 Pop Quiz! 1. What share of income taxes are paid by corporations? About 7% 2. What is Oregon s ranking for business tax burden? 50 th place 3. How much more would Oregon have to raise from corporations to equal the U.S. average? $7.2 billion / biennium 76% 4. What % of corporations pay Oregon minimum taxes? 5. What was Oregon s corporate minimum tax from 1931 to 2009? $10 / year

23 State and local tax revenue in Oregon PROPERTY TAXES UNEMPLOYMENT INSURANCE TAXES GASOLINE AND USE FUEL TAXES OTHER TAXES AND LICENSES CORPORATE INCOME TAX EVERYTHING ELSE MEDICAL PROVIDER TAXES PERSONAL INCOME TAX Legislative Revenue Office, 2013 Oregon Public Finance: Basic Facts

24 Effects of Measures 5 & 50 $13 billion less revenue per biennium today because of 1990s property tax cuts

25 Oregon income tax collections Personal income tax $7,000 Corporate income tax Oregon income tax collections in millions, inflation adjusted to 2012 $ $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $- Legislative Revenue Office, 2013 Oregon Public Finance: Basic Facts

26 Oregon North Carolina Louisiana Utah Delaware Indiana Georgia Missouri South Dakota Nebraska Texas Oklahoma Maryland California Virginia Ohio Arkansas Alabama Iowa Idaho Connecticut Kentucky Massachusetts Tennessee Washington Pennsylvania Illinois Michigan Arizona Colorado New Jersey Kansas Minnesota Nevada Montana South Carolina Wisconsin District of Hawaii New Hampshire New York Mississippi Rhode Island Florida Wyoming Vermont West Virginia Maine New Mexico North Dakota Alaska Oregon has the lowest business taxes in the country 30.0% 25.0% 20.0% Business taxes as a share of pre-tax business profits 15.0% 10.0% 5.0% 0.0% Anderson Economic Group, 2014

27 How much more would Oregon have to tax businesses to move up the state rankings? To be equal to: Louisiana (48 th) Idaho (31 st) U.S. average Per biennium $2.3 billion $6.4 billion $7.2 billion Anderson Economic Group; Bureau of Economic Analysis

28 76% of corporations in Oregon pay the minimum tax Minimum tax amounts to less than 0.1% of sales Many profitable companies pay even less than the minimum Oregon Department of Revenue, FY2011

29 Minimum corporate tax rates Oregon sales ($M) Before M67 After M67 Average tax/sales < $0.5M $ % $0.5-1M $ % $1-2M $1, % $2-3M $1, % $3-5M $2, % $10 $5-7M $4, % $7-10M (since $7, % $10-25M 1931) $15, % $25-50M $30, % $50-75M $50, % $75-100M $75, % $100M+ $100, %

30 What can we do about it?

31 Fight for a Fair Shot: Raise the Minimum Wage Paid Sick Days Fair Pay Retirement Security Raise revenue to reinvest in infrastructure, education and public services

32 Revenue target $3-6 billion to invest in education, infrastructure and public services

33 Oregon s tax system is regressive Institute on Taxation and Economic Policy, 2013

34 Revenue options Property taxes Sales taxes Personal income taxes 1. Politically viable 2. Raises sufficient revenue 3. Right for Oregon s economy

35 Who are we really expecting to pay? Average income, 2012 $18,000,000 $16,000,000 $14,000,000 $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 Annual tax increase with 14.9% top bracket for 250/500k + $8,500 $874,000 + $148,000 + $71,500 + $25,500 $- Oregon Department of Revenue, full year filers 2012 Percentile breakdown of the top 1%

36 Revenue options Property taxes Sales taxes Personal income taxes Corporate income taxes

37 Taxing corporations more $120 $100 $80 Headquartered in Oregon Headquartered elsewhere Billions $60 $40 $20 $- <$1M $1-10M $10-50M >$50M Oregon sales Oregon Department of Revenue, FY2011 C corporation sales

38 What will it take?

39 Daniel Morris, MS, PhD Research Director