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Tuesday, November 24, 2009

Economists Say "Job Killing Taxes" Will Likely Not Actually Kill Any Jobs.

Posted by Sarah Mirk on Tue, Nov 24, 2009 at 4:07 PM

Driving to Salem last week, a familiar sight loomed occasionally up from the farmland: between here and the state capitol building, I counted ten Stop Job Killing Taxes billboards. I started wondering about that catchy name. Job. Killing. Taxes. It really doesn't get any more succinct and terrible.

Economists with conservative think-tank the Cascade Policy Institute say the new taxes on corporations and Oregon's wealthiest two percent of citizens will cost the state about 70,000 jobs. As I've written about before, the taxes are up to a statewide vote this January as Measure 66 and 67.

But today economists at DC's Urban Institute released a report that rips the 70,000 jobs-killed argument to shreds. Read through the pdf here, but economists Kim Rueben and Rosanne Altshuler point out that the Cascade Policy Institute's estimates were based on some seriously flawed calculations. First of all, the "70,000 jobs lost" estimate doesn't account for the jobs that the state will lose if the taxes don't pass and the government has to slash its budget by $733 million... which would most likely mean firing scores of nurses, state troopers, in-home care workers and other service providers. Also on the list of things the conservative economists neglected to include? That the revenue from the taxes will bring in millions of dollars of federal matching funds.

I called Rueben to ask her estimate of the number of jobs the taxes would kill. "My best estimate is none," says Rueben, agreeing instead with the Legislative Revenue Office's study that the taxes will be good for the state's economy. Ouch.

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The jobs killed will not be government jobs - those have continued to grow.
Here's a simple way to remember - when taxes go up on the "rich" (those who own small businesses and job creators) - wages and jobs are cut and prices go up. The rich can't take the hit and stay in business - it's passed on to you.

Posted by D on November 24, 2009 at 4:43 PM | Report this comment

@D: You are an idiot, you seem to get your soundbytes from Rush.

One of the big things the "job killing taxes" does is eliminate taxes on the first couple thousand dollars of unemployment benefits. In other words, if the "job killing taxes" aren't passed, then we are going to tax the poor. The poor tend to spend their money in state on things like food, where as the rich tend to spend their money out of state/country on things like vacations. As such I expect that the net affect for the state itself will be positive, where as for the world as a whole, it will be neutral. (The only person I know who will have to pay more under this measure says he'll have to spend less time on vacation in Costa Rica, and more time at the restaurants downtown. The people I know that will have to pay less say they'll be able to afford to get current on their rent.)

Posted by Matthew D on November 24, 2009 at 5:58 PM | Report this comment

I'll let your iron clad statistics of how people spend money slide this time.
But I'd rather listen to your refutation of the economic reality ('Rush' has nothing to do with it) I put forth instead of listening to you call me names.


Posted by D on November 24, 2009 at 6:59 PM | Report this comment

Fascinating. You can't back up your economic fantasy with even anecdotal evidence. Complaining about my statistics when you are just parroting Lars (you are right, it probably isn't Rush,) doesn't make you right, it just makes you look stupid.

(Hint: Most small businesses are sole proprietorships, which will see their taxes increase by a whole $0 under this measure.)

Posted by Matthew D on November 24, 2009 at 7:31 PM | Report this comment
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Hmmm...maybe a couple hundred state workers layed off (and in turn a smaller state government!), or 70,000 private hard working people losing their jobs. Bye bye bloated state workers!

Posted by Poopy on November 24, 2009 at 11:23 PM | Report this comment

@Poopy: You've quoted some numbers, so you are better than D, (not that that is that hard.) Only problem: Your numbers are completely wrong. You have to add the Randall Pozdena and Cascade Policy Institute numbers to get 70k, (not average them, which would be what any person of subnormal and above intelligence would do.) If you just look at the state police, it is more than a couple hundred state employees, but most of the money goes back into the community in the form of various subsidies, (not supporting "bloated" state workers at all, they are people that provide medical care to the poor and the elderly and therefor keep swine flu from killing us all.)

But besides the fact that everything you say can be proved to be untrue in under 10 seconds on Google, good job on your post, it is still better than D's.

Posted by Matthew D on November 25, 2009 at 12:03 AM | Report this comment

Economists are all full of shit. You're right to be suspicious of anything coming out of the Cascade Policy Institute, but why would you put any more faith in analysis coming from something called the "Urban Institute" based in D.C.?

Hmmm, could it be because their findings happen to jibe with your politics? Being an unthinking Lefty is no better than being an unthinking Righty.

Posted by Blabby on November 25, 2009 at 9:34 AM | Report this comment

Why is it that I pay get payed a mere fraction of what these rich assholes make, yet I'm willing to spend that money if it can make the slightest difference. I'm begging everyone to vote, and make sure the rich pay their fair share of taxes.

Posted by chomp on November 25, 2009 at 10:00 AM | Report this comment

@Blabbu: So far as I can tell, you think the following professions are full of shit: economists, urban planners, and journalists. Is this a fair assessment of your opinion? Just checking...

Which professions do you think are not full of shit?

Posted by Graham on November 25, 2009 at 10:08 AM | Report this comment

The ones that actually reap money. i.e. Berkshire Hathaway.

Economists telling us everything is AOK before the housing bubble, and now telling us things are going to get better, are full of shit. We still have 25% of CURRENT homeowners under water, 1/7 homes UNOCCUPIED, and 13 trillion in debt while fighting 2 wars that we obviously will never win. Oh and we give massive amounts of money to Israel for who the fuck knows what reason. But everything is AOK. Where does logic fit into the picture there?

Matthew D. Please remove yourself from the conversation if you are going to ad hom.

@Graham: Don't be too hard on him, at least he didn't make everything in his post up. He's got Poopy beat.

Posted by Matthew D on November 25, 2009 at 11:31 AM | Report this comment

@unicode_idiot: Please remove yourself from all conversations on this site until you get a real username! The site doesn't support unicode, it didn't last week, and by all evidence, it won't next week either.

P.S. Ben Franklin thinks you are insane and W. C. Fields thinks you are a fool. ("The definition of insanity is doing the same thing over and over and expecting different results." and "If at first you don't succeed, try, try again. Then quit. There's no point in being a damn fool about it.")

Posted by Matthew D on November 25, 2009 at 11:49 AM | Report this comment

Graham, that's a good start to the list. You know why older folks all start to get more conservative? Because they realize that everyone is full of shit.

It makes it hard to listen to people who claim to know the future. It also makes it hard to hear the government announce some expensive new project, because despite what they claim, they have no clue if it will actually work, or even what the actual cost will be.

That's when every new proposal starts to look too risky. Not because I hate my fellow man, but because the risks are too high that the project will double in price and not even accomplish what they claim.

Journalists are mixed bag. Those who just try to report news as straight as possible are fine. The seemingly bottomless supply of columnists and pundits are generally full of shit.

Posted by Blabby on November 25, 2009 at 12:42 PM | Report this comment

It’s interesting that Urban Institute economist Rueben now says her best estimate of job losses from M66 and M67 will be “none.” In her report she and her co-author state:

“While the corporate income tax (and personal income tax) may place a drag on the economy, the lack of a retail or wholesale sales tax in Oregon tends to encourage productive activity.”

They thus seem to be making two assumptions, which most economists will agree with:

1. Increased taxes have detrimental effects on the economy.

2. Reducing tax liability improves productivity.

And, if Reuben really is agreeing with the Legislative Revenue Office study, then she’s agreeing with its conclusion that these taxes will be negative for the economy in the first seven years, and neutral or positive for the economy after that only if the new tax money is used "effectively" enough.

Rueben and her partner may differ with Cascade economists job loss estimates, but to say that no jobs will be lost stretches credibility.

Posted by SteveBuckstein on November 25, 2009 at 12:54 PM | Report this comment

It’s interesting that Urban Institute economist Rueben now says her best estimate of job losses from M66 and M67 will be “none.” In her report she and her co-author state:

“While the corporate income tax (and personal income tax) may place a drag on the economy, the lack of a retail or wholesale sales tax in Oregon tends to encourage productive activity.”

They thus seem to be making two assumptions, which most economists will agree with:

1. Increased taxes have detrimental effects on the economy.

2. Reducing tax liability improves productivity.

And, if Reuben really is agreeing with the Legislative Revenue Office study, then she’s agreeing with its conclusion that these taxes will be negative for the economy in the first seven years, and neutral or positive for the economy after that only if the new tax money is used "effectively" enough.

Rueben and her partner may differ with Cascade economists job loss estimates, but to say that no jobs will be lost stretches credibility.

Posted by SteveBuckstein on November 25, 2009 at 12:55 PM | Report this comment
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the big businesses that pay 10 dollars a year can move out of state... oh WAIT, they will be paying more no matter where they go even AFTER we raise the tax...
less than 2% of Oregonians are going to pay more in taxes, I am not sure what the big deal is... less greed, more help would be nice.
why would a rich person want to not help out his country more than he does already ? he _is_ a patriot... isn't he? a good, god fearing man would want to help his community wouldn't he?

Posted by not likely today on November 25, 2009 at 9:30 PM | Report this comment

The popular word today is sustainability. The public or private sector is unsustainable without profitable businesses. The public sector and the private sectors have a partnership. If the following statements are true we should not vote yes on 66 or 67 as a matter of principle. 1. If our state budget is increasing 2. If we have over 400 million waiting for an emergency. 3. If 250 million of tax increase is for raises for the public sector. 4. If state is adding any new jobs. 5. If education, saftey and health services are being used as pawns or spin because these work on our emotions. 6. if our legislature and governor answer to the unions and not taxpayers.

Posted by dustyone on December 30, 2009 at 10:32 AM | Report this comment

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