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GOVERNMENT:
State and Local Taxes

 



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Portlanders want a stable, equitable tax system to fully fund the services they value.

Section Summary

Most comments in this section involve suggestions for how to re-align the tax system to better reflect community members’ values. While disagreements abound over specific measures and strategies, there is general consensus that the tax system should be equitable, stable and capable of fully funding the services that matter most to people. There is also agreement among respondents that the City needs to rethink its use of tax breaks and incentives.

While many acknowledge that part of the problem is at the state and federal levels, they nevertheless look to local government to align its taxing and spending practices with community members’ values. That being said, feelings towards paying taxes range widely, with some expressing a willingness to pay higher taxes for higher-quality services, others wanting the City to use the money it has more effectively and still others wanting lower taxes. Additional areas of debate include whether or not to implement a sales tax and whether the current tax burden is too high, too low or just right for individuals as well as different types of businesses.

Summary of Main Ideas

  1. Portlanders support taxes to fund the services they value.
  2. The current tax system is not equitable.
  3. Tax breaks should be used to promote the community’s values.
  4. The tax system must support high-quality public education.

Summary of Tensions and Disagreements

  1. Are taxes too high, too low, or just right?
  2. Should Portland adopt a sales tax?

MAIN IDEAS

  1. Portlanders support taxes to fund the services they value.
  • While some individuals are simply opposed to paying taxes, most people who commented on this topic support paying taxes to adequately fund services they believe to be necessary.
  • However, many people state that their willingness to pay taxes hinges on how tax revenues are used.
  • Many Portlanders say they are willing to pay the same amount or more in taxes if the following conditions can be met:
    • Tax revenues are spent efficiently on services and programs that work;
    • Tax dollars are used to fund people’s top priorities, such as the maintenance and improvement of public infrastructure and the provision of excellent public education;
    • Tax revenues are used to improve the livability of the city as a whole;
    • Tax revenues are not used on special projects with limited appeal (these projects should be funded by those who want to see them happen, not the general public); and
    • Tax revenues are not used to help private interests make more money or gain competitive advantage (for a more complete discussion on how people would like their tax dollars spent, see Government: Spending).

“[I value that] there has been a willingness to experiment with new methodologies of governing, a willingness to tax ourselves for important community causes, and efforts made to keep the conversation going about what Portland should be...”

"People will pay for the public works and services they see and approve of. The Water Bureau’s ‘Field Day’ for the public was one of the best open windows into an otherwise costly and maligned bureau. Copy this everywhere.”

"I would like to see complete transparency in where our tax money is going—All tax money including fees and fines.”

Sample Strategies:

  1. Change the anti-tax public sentiment by demonstrating responsible use of public funds and by educating the public.
  2. “Begin an add campaign to educate the public on why paying taxes can be a good thing by showing them the benefits it produces. Portland is great because of all the public goods it provides…”

  1. The current tax system is not equitable.
  • Portlanders want a fair tax system, although what this means varies depending on people’s personal and political beliefs.
  • Many Portlanders believe that the current tax systems benefits wealthy individuals and corporate businesses while overburdening small businesses, lower to middle- income individuals, childless people and property owners.
  • Some perspectives on the equity of the current system include the following:
    • Individuals pay too much, businesses pay too little;
    • Small businesses pay too much, big corporations pay too little;
    • Long-time residents of gentrifying neighborhoods pay too much (property taxes), while higher-income residents of condos and new development pay too little;
    • Drivers of automobiles pay too much, cyclists pay too little; and
    • Residents of Vancouver who work in Portland pay too little, especially for transportation services and upgrades.
  • Some people acknowledge that the structural inequities in the system are created at the state and federal level; however they still think Portland can improve the equity of its tax policies.
"Less taxes for low-income. If we have less taxes we can keep more of the money we earn for living and would reduce theft and some other common crimes.”

"Higher taxes for the corporate businesses that have been allowed for too long to pollute our air, rivers, and communities.”

"Require housing developers to pay for their need to expand the utility infrastructure – the taxpayer should not have to support their desire to develop and make more dollars.”

Sample Strategies:

  1. “The city leadership probably needs to form an alliance with other State leaders on an overall tax reform agenda.”
  2. Institute a property-tax freeze for the elderly and for long-time residents of gentrifying neighborhoods.
  3. Portlanders suggest lowering certain taxes and raising others to improve the overall equity of the tax system.

Lower taxes on:

  • Small businesses;
  • Lower and middle-income individuals; and
  • Property owners.

    Increase taxes on:

  • “Companies with an excess of five million in revenues per year;”
  • Corporations;
  • People who can afford to pay them;
  • Alcohol;
  • Cigarettes;
  • Marijuana (legalize and tax);
  • Unhealthy products such as candy, soda and high-fructose corn syrup;
  • Sports Utility Vehicles (SUVs);
  • Cars entering the downtown area;
  • “Why not tax or license bicycles; they eat up tax dollars?”
  • “Find a way to tax the ‘live in Washington but buy and work in Portland’ people. They use our roads but do not pay for them.”

  1. Tax breaks should be used to promote the community’s values.
  • Portlanders want tax breaks used to narrow the gap between the “haves” and “have nots” and to promote broad social goals such as sustainability and equity.
  • They want tax breaks to assist organizations and companies that improve livability for the City as a whole, as opposed to those that are purely trying to profit.
  • Portlanders do not support the following types of tax breaks:
    • Tax abatement for developers of close-in, high-end housing;
    • Tax breaks to lure large companies to the area (many people spoke out against this); and
    • Tax breaks to encourage well-off residents to purchase high-end housing such as condos in the Pearl and South Waterfront.
  • Many Portlanders support tax breaks for the following:
    • To encourage businesses to adopt sustainable practices, including “cradle to cradle” technology and renewable energy;
    • To enable longtime residents of gentrifying neighborhoods to keep their homes and businesses;
    • To assist small businesses;
    • To encourage the creation of more affordable housing;
    • To encourage/reward the use of mass transit and environmentally-friendly forms of transportation; and
    • To support artists (attract them to Portland, help them obtain affordable gallery, work, or living space).
"Our future may not be best served by tax incentives to attract large companies, rather it may be better served by helping to grow new, small, local companies that promote employee ownership or community ownership of profitable operations that allow wealth to accumulate where none has existed before.”

“…Please keep the city out of the business of trying to pick the next economic winners (biotech, etc..) They city can best support economic growth by ensuring good infrastructure, excellent education systems, livable neighborhoods, effective energy policies, and reasonable (and fair) taxation.”

Sample Strategies:

  1. Tax based on waste not profit, so those companies that profit while reducing waste get a tax break.
  2. Give a tax break or credit to stay-at-home parents who provide their own childcare.
  3. Use tax incentives to “encourage Portlanders to participate in local boards governing community, water and land management.”
  4. Tax land not buildings, in every 'center' especially Gateway…”
  5. Provide financial incentives for planting trees.
  6. Allow people to write off a TriMet pass on their tax returns or provide another tax benefit to using public transportation.
  7. Subsidize free parking spots for Flex Car to encourage more people to use this service.

  1. The tax system must support high-quality public education.
  • There is incredible support for our public school system (see Education: pre-K-12 Schools).
  • A large number of respondents want Portland's public schools fully funded, and a  tax system that ensures educational excellence, small class sizes, art and music classes, physical education and numerous high-quality after school programs (see Education: Funding).
  • Frustration is expressed over repetitive, short term, and seemingly ineffective funding “fixes” such as the Multnomah County I-Tax.
  • People want elected officials to develop stable, long-term solutions to the recurrent funding crises in the schools.
“Improve our schools! I will pay more taxes for that.”

Sample Strategies:

  1. Raise taxes to support education.
  2. Institute a Sales Tax and have the proceeds fund education.
  3. Re-prioritize how tax funds are used, so low-priority projects receive less funding and schools receive more funding.
  4. Reduce administrative expenses in the schools and find other ways to use current funds more effectively.

    Note: There are major disagreements around what is needed in order for schools to be fully funded. For a more complete discussion, see Education: Funding.


TENSIONS AND DISAGREEMENTS

  1. Are taxes too high, too low or just right?

    Portlanders express a range of attitudes and feeling towards paying taxes. Some are glad to pay taxes, no questions asked. Many of these Portlanders feel that the current tax burden is too low, citing funding crises in education, a growing homeless population and aging City infrastructure as proof that more funds are needed to solve the community’s problems.
“[In 2030] we would have a highly educated populace. As such, they would be even more concerned about the quality of their city. People would pull together for the common good, seeing taxes going for value returned. The anti-tax thing drives me nuts.”

A larger group of people understand the importance of taxes, but feel their dollars are wasted and/or misused. Complaints range from inefficient government as a result of duplicated services to government spending on the wrong priorities. This group of Portlanders feels that the problem is not the tax level but how tax money is spent (see Government: Spending). They want to see the government produce maximum benefit with the dollars it already has before asking the community for additional funds.

“If the money from taxes is spent wisely and effectively, I don’t mind paying more taxes.”

Finally, there is a very small group of respondents that is suspicious of taxes and would prefer to pay less, regardless of how well funds are used. These individuals tend to feel that taxes are already far too high and that government is involved in many activities that are unnecessary.

“[In 2030] taxes are lower and individuals take more responsibility for their special interests.”
  1. Should Portland adopt a sales tax?

    There is a great desire for a strong and sustainable tax base, although Portlanders disagree as to whether this sustainable tax base should include a sales tax. People who support a sales tax believe that it could solve many of our funding problems, from recurrent funding shortages in schools to our need for a more extensive public transportation system. They also believe that it would help the state “weather the ups and downs of the economy,” providing more stable, reliable funding for programs.

    Those who oppose a sales tax cite the lack of such a tax as one of the best things about Portland and the entire state. They also tend to believe that government could be doing a better job with the money it already has, spending dollars more efficiently and focusing on the public’s priorities (see Government: Performance and Government: Spending).

“I know this is a state issue, but I'd like to see Portland push it: a State Sales tax with an across-the-board reduction in property taxes (with exemptions for food and medical care purchases).”

"[In the future] we don’t rely on a sales tax, but instead have learned how to budget our tax dollars more effectively.”

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