Clearing the Air on Tax Day

Report
April 15, 2001By Jeff Thompson

By most measures Oregonians are paying the same share of their income in taxes as they were paying almost twenty years ago. In 1999, all state and local taxes were equivalent to 10.2 percent of Oregon's income. This measure of effective tax rate declined over the last ten years, and has fluctuated between 10 and 12 percent since 1979.

The effective personal income and property tax rate for all Oregon households, excluding those taxes not directly paid by households, was 6 percent in fiscal year 1999. This measure of effective tax burden has been approximately 6 percent since the 1970s, with a low of 5.5 percent in 1987 and a high of 6.5 percent in 1982.

Between 1977 and 1998, the effective income tax rate (tax due as a share of adjusted gross income), of the average Oregon taxpayer fluctuated around five percent, never rising as high as six percent and never dropping to four percent.

The effective tax rate for Oregon businesses declined by more than one-third during the 1990s. Oregon's 1999-2000 effective business tax burden was the lowest among seven Western states. Businesses paid 45 percent of all Oregon taxes in 1983-84 and only 39 percent in 1997-98. Businesses paid 57 percent of all Oregon property taxes in 1983-84 and only 46 percent in 1997-98.

Working poor Oregon families of four had the eighth highest state income tax burden in the nation in 2000. The state income tax burden for families earning slightly more than poverty (125 percent) was third highest. Oregon's income tax threshold was the 13th lowest in the nation in 2000.

In 1999, a family in the middle of the income distribution is paying a smaller portion of their personal income in federal taxes now than at any other time in the past thirty years.

The report also dispels some common fallacies. The report notes:

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