Salem Democrats Will Increase Your Taxes!

Oregon: Get ready for the bad news energy bills

Oregon Catalyst – January 22, 2015 — by Senator Doug Whitsett

Oregonians are about to be reminded that elections do matter. At least 45 bills relating to energy have already been introduced for the 78th Legislative Assembly. Most, if enacted, will be bad news for Oregon’s economy.  The list of bills cited here are representative of what is being planned, but is by no means complete. The measures generally fall into three categories.

  1. Artificially Increasing Fossil Fuel Costs

The first class of bills artificially increases the cost of fossil fuel energy. They include bills that would amend the Oregon Constitution (HJR 10, HJR 11) and enact statutes (HB 2082, HB 2159, HB 2550) authorizing and levying what amounts to direct sales taxes on fossil fuel products. Additional indirect or hidden taxes would be levied by several other bills (HB 2192, HB 2450, SB 324). Another bill (HB 2086) would establish a new fee on fossil fuel generated electricity that will ultimately be paid by ratepayers.

  1. Subsidizing Green Energy

A second group of measures would artificially reduce the cost of renewable energy by enacting or extending subsidies, tax credits and other incentives. They include: HB 2187, HB 2193, HB 2216, HB 2447, HB 2448, HB 2449, HB 2559, HB 2632 and HB 2745.

These hidden cost reductions serve to make the renewables such as wind and solar appear more competitive on the utility bill; however, the real cost is simply being shifted from the utility ratepayer to the taxpayer.

  1. More Greenhouse Gas Regulation

The final class of bills generally expands the regulation of greenhouse gases emissions (SB 477, HB 2572). Their primary purpose serves to artificially increase the cost of using fossil fuel energy even more.  The alleged necessity for reducing greenhouse gas emissions has a long and tortuous history that should cause Oregonians to consider its validity.

Increasing emissions and accumulation of greenhouse gases was originally blamed for causing the general global cooling that occurred during the 1970s and early 80s. Many leading scientists were convinced that immediate reductions in the combustion of fossil fuels was required to avert the impending doom of global winter and mass starvation.  Fortunately, those scientists were wrong. Global temperatures began rising in the 1980s, in spite of the increasing emission and accumulations of greenhouse gases.

As global temperatures continued to rise, many leading scientists began using complex computer modelling to predict uncontrollable temperature increases that would result in global summer, extensive droughts, rising ocean levels and mass starvations. Ironically, they cited the same atmospheric increases in greenhouse gases that they had previously blamed for global cooling.  By 1999, global warming had ceased, even though greenhouse gas emissions continued to accelerate and to accumulate in the atmosphere. By virtually all credible empirical measurements, including atmospheric, terrestrial, and oceanic global data, temperatures have remained stable or have reduced since 2000. Their predicted catastrophic raising of ocean levels, expanded droughts and mass starvation have not occurred.

Rather than admit their failed expectations, many leading scientists have simply changed their prophecy. They now blame accumulating greenhouse gas emissions for causing climate change. The genius of this prediction is that it can never be specifically disproved. Our planet has undergone significant changes in global climate for millennia.

Some scientists and politicians now blame greenhouse gas emissions and accumulations as the cause for virtually every adverse weather event that occurs on the planet. They are able to keep up a near constant media harangue because weather is changing somewhere on the planet virtually every day.

The most troubling part of their prognostications is that they ignore both empirical global and U.S. data that clearly show severe weather events are occurring less frequently rather than more frequently. Significant increases in populations and growth in structure density often result in increased storm damage and loss of life. Nonetheless, the frequency and intensity of weather events has been declining for more than a decade at the same time that greenhouse gases continue to accumulate.

The prediction that we are near or have reached “peak oil” is another alleged reason for reducing the use of fossil fuels.  The “peak oil” assertion claims the global demand for fossil fuels has permanently exceeded the global supply. Recent innovations in drilling and fossil fuel extraction have belied that claim. Global over-supply of both oil and natural gas prices are causing a near freefall in the price of fossil fuels.

Yet another allegation is that the United States must develop alternative energy resources in order to be energy independent. However, our nation has regained its position as a world leader in fossil fuel production.  We are now producing a great deal more natural gas than we can use and our known reserves will last well more than 100 years. Our capacity to refine oil has greatly surpassed domestic production. We are now poised to start exporting some of our fossil fuel production to the global market.  Virtually all of this increase in fossil fuel production has occurred on private land. Much greater known resources remain untapped under public lands, where exploration and development have been stalled by government edict.

The final claim is that the reduction of greenhouse gas emissions is a matter of social justice. In my opinion, nothing could be further from the truth.  People who live in poverty pay a much greater percentage of their family incomes to secure energy. Artificially increasing energy costs will cause this sector of our society much economic harm.

In fact, affordable energy is the greatest predictor of global economic and social well-being.

Even if the doomsday predictions regarding greenhouse gas emissions were credible, unilateral action to reduce emissions in Oregon would have no measurable global effect. Oregonians represent only 1.3 percent of our national population and less than six-one-hundredths of one percent (.000057) of the global population. The complete cessation of emission from combustion of fossil fuels in Oregon would benefit no one while permanently crippling our economic ability to compete with other states and nations.

In my opinion, the adoption of draconian greenhouse gas emission reduction legislation in Oregon will only serve as an empty, useless gesture to satisfy the desires of the scientific and political elite.

Senator Doug Whitsett is the Republican state senator representing Senate District 28 – Klamath Falls



Opening the Tax Floodgates

Hold your wallets. Oregon Democrats ruling Salem want to raise your taxes

Willamette Week – January 14, 2015

Lawmakers convened in Salem on Jan. 12 to attend Gov. John Kitzhaber’s inaugural address and start the business of making new laws.

Many states saw Democrats wiped out in the 2014 elections. But Oregon gave its Democrats more muscle. The House and Senate have bigger Democratic majorities and, with a friendly governor, they can push through pretty much whatever they want.

What they want to do is raise taxes. If there’s a way state government has missed collecting more money from Oregonians, Democrats seem willing to find it.

Democrats have introduced bevies of bills that would raise taxes, hike fees, trim deductions or otherwise replumb the state’s tax system. The bills could impact people who buy gas, get a tax break on their mortgage, or pay income tax. In other words, practically everyone.

Democrats make a good case: Oregon is still coming out of the Great Recession and needs to strengthen its schools, social services and the delivery of health care.

Republicans worry that too much of Oregonians’ money will be washed away by an unchecked Democratic majority. The Senate Republican caucus has forecast a “tax tsunami.”

There’s a tension bigger than partisan sniping, however. Underlying everything is the question of tax fairness and redesigning Oregon’s income-tax dependency so the state budget doesn’t get slammed every time the economy sours.

On those questions, Democrats are not of one mind.

“I want to talk about ways to bring stability to a system that is far too volatile,” says Sen. Mark Hass (D-Beaverton), chairman of the Senate Finance and Revenue Committee. “Some of my colleagues want to find ways to raise $2 billion in new revenue. Those are two totally different mindsets.”

Some tax ideas are familiar. Others are simply odd.

Here are five places where the debate about taxes in Oregon will land.


The Pay-as-You-Pump Tax

Otherwise known as the state gas tax, which now stands at 30 cents a gallon. (The feds add another 18.4.) Gas taxes raise $500 million a year and are the primary source of transportation funding, but they largely go to bailing out the Oregon Department of Transportation, which is essentially broke after years of heavy borrowing for construction projects.

One of the takeaways from last week’s Oregon business summit, which brought together politicians and business leaders, was a bipartisan commitment to fund the building of new roads and the fixing of old ones.

Gas prices are in free fall, which could make a tax hike more palatable. “That makes people think they can increase the gas tax,” says pollster Adam Davis of DHM Research. “It’s something they think they can do because of the price drop.”

Jason Williams, executive director of the Taxpayer Association of Oregon, which is opposed to a higher gas tax, acknowledges his group tried and failed in 2009 to stop a 6-cents-a-gallon gas-tax increase by referring it to voters. Williams says his group will be better prepared if lawmakers repeat the move.

“We were told then a gas-tax increase would fix our transportation problems,” Williams says. “In reality, they spent it all and now they are back for more.”

What’s likely to happen: Business leaders like transportation taxes, and that will embolden legislative leaders and Kitzhaber to increase them.


The American Dream Subsidy Tax

Also known as the home mortgage interest deduction. Reformers such as the group Tax Fairness Oregon don’t like this federal and state deduction, which disproportionately benefits high-income earners by subsidizing the loans they take out to buy homes. The mortgage deduction costs the state’s general fund $650 million a year in forgone taxes.

The rationale for the deduction is that it encourages home ownership. But studies have shown that in countries such as Canada that don’t allow homeowners to deduct their interest payments, home ownership is just as high as in the U.S.

“The home-interest deduction does not promote home ownership,” says Jody Wiser of Tax Fairness Oregon. “What it does is support the purchase of ever-larger homes and increases our carbon footprints.”

One legislative proposal would limit mortgage interest deductions to $10,000. That’s dead on arrival because 62 percent of Oregonians own homes. Another proposal ending the vacation-home interest deduction for those earning over $125,000 is an easier target—but has powerful patrons.

What’s likely to happen: Impassioned pleas from social-service and schools advocates, who will glow afterward from this politically radioactive idea.


The Save-the-Polar-Bears Tax

Better known as the low-carbon fuel standard. The standard requires sellers to lower the carbon content of transportation fuels, either by blending with biofuels, incorporating renewables or purchasing credits.

Lawmakers in 2014 couldn’t muster enough votes to renew Oregon’s standard, which expires by the end of 2015. The Oregon League of Conservation Voters played a big role in Democrats’ November victories. Now the OLCV and other enviros want the standard extended. It’s also a big priority for Kitzhaber.

“The practical effect would be to reduce carbon emissions by 4 percent overall statewide,” says OLCV executive director Doug Moore.

Critics say the standard would drive up gas prices to cover the high cost of alternative fuels. “The low-carbon fuel standard is a hidden gas tax,” says Paul Romain, a lobbyist for the Oregon Petroleum Association. “Our polling says people don’t like it.”

Romain says he also doesn’t like the idea of a carbon tax, which taxes fossil fuels. But he says at least that’s more transparent. There are a couple of carbon-tax proposals pending. The idea is that the state would levy taxes on fuel suppliers and utilities to compensate for the environmental damage fossil fuels cause. But most people who love the idea of a carbon tax concede Oregon is not yet ready for one.

What’s likely to happen: The carbon tax will fail. The low-carbon fuel standard will breeze through the Senate, where it died in 2013, but faces slower going in the House, whose members are less familiar with it.


The Boot-the-Kicker Tax

The kicker is the state’s unique constitutional money-back provision that refunds taxpayers, but only if tax receipts exceed state estimates by more than 2 percent.

The last time Oregonians saw a kicker was in 2007, when taxpayers got an average refund check of $609. The kicker—when it comes around again—will be as a credit on your state tax return.

Williams of the Taxpayer Association of Oregon says scrapping the kicker would allow government to spend every dime it gets—even money that hasn’t been budgeted. “Taxpayers should be very afraid,” he says.

Democrats hate it as a money-sucking 1970s dinosaur of tax reform gone haywire. Plus, keeping kicker money funds education and social services. “We would definitely support getting rid of the kicker,” says Wiser.

What’s likely to happen: Ending the kicker requires a vote of the people, nearly all of whom benefit from the sporadic windfalls. Democrats may see too much risk for too little gain.


The High-School-Dropout Tax

No, lawmakers aren’t planning to tax that dude holding a cardboard sign by the freeway exit. Instead, this concept, sponsored by the House Revenue Committee, would raise personal and corporate income taxes if high-school graduation rates fall below set levels.

Taxes would fall proportionately when graduation rates rise. The proposed tax would be triggered in either direction when then state superintendent of instruction releases figures annually for the state’s 198 school districts.

Davis, the pollster, says that Democrats may be mistaking their strong November performance as voter enthusiasm for more taxes. Asked how he thought they’d feel about linking taxes to graduation rates, Davis was nearly speechless. “Oh, my God,” he says.


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