As you wrestle with your 1040s, 1099s, W2s, Schedule C’s and other income tax impedimenta, the Oregon Center for Public Policy offers a few facts that should comfort you – and probably will surprise you, especially if you get your information from Glenn Beck and Lars Larson.
Surprise No. 1: President Obama and the Democratic Congress have not raised taxes for the overwhelming majority of Americans. In fact, 98% of American taxpayers – and 98% of Oregonians – got an income tax cut in 2009.
OCPP cites a report just released by Citizens for Tax Justice that found 98% of working Oregon taxpayers (“working” defined as those who report earned income) benefited from at least one of the four tax cuts included in the American Recovery and Reinvestment Act signed into law by Obama last year.
On average, Oregonians received $1,087 from these cuts. For the bottom 20% of earners the average was $461, for the next 20% it was $693, for the third 20% it was $650, and for the fourth 20% it was $753. The next 15% of Oregon taxpayers got an average tax cut of $2,090, the next 4% got $4,556, and the top 1% got a cut of $2,820.
A large portion of the break enjoyed by Oregon taxpayers came from the Making Work Pay Credit, which provided a refundable credit of up to $400 per individual or $800 per couple for taxpayers with incomes below $75,000 ($150,000 for married couples) with the aim of stimulating consumer spending. The average Oregon taxpayer got a $520 credit under that provision.
Surprise No. 2: State taxes and spending in Oregon now are no higher than they were 30 years ago, measured as a percentage of Oregonians’ total income.
“The public sector is no more expensive today than it was back in 1980,” OCPP Executive Director Chuck Sheketoff said in a news release. “It costs Oregonians roughly the same share of their total income” – that is, 15% – “as it did three decades ago.”
OCPP analyzed US Census data for every year from 1980 through 2007 (the latest available) and found that “with some fluctuations, in each of those years roughly 15 of every 100 dollars of Oregonians' combined income went to state and local governments in the form of ‘own-source general revenue.’” “Own-source general revenue” includes state and local taxes, fees and charges, and money from other sources such as the state lottery.
But at the same time, working Oregonians who think their taxes have gone up aren’t wrong, the OCCP said. That’s because the tax burden has shifted, with Oregon families being made to shoulder a bigger share of the state tax load as corporations have paid less.
During the period the OCPP analyzed, the share of total revenue paid by corporations went down from 4.6% to 2.2%, while the share paid by Oregon households grew from 22.6% to 26.5%.
“For what it’s worth,” the OCPP’s report said, “Oregon ranks in the middle of the pack among states and the District of Columbia for both the revenue state and local governments generate and the money they spend as a share of personal income.”