The typical taxpayer will pay less than the average
A new analysis of the temporary income tax increase on the January 28, 2003, ballot shows that the typical Oregonian will pay less than $6 a month in extra taxes over the three years the temporary tax increase will be in effect. The study by the Oregon Center for Public Policy shows that a majority of Oregonians – the lowest income 60 percent – will see their taxes increase less than $3 a month on average over the three-year time period.
“The typical Oregonian will be paying less than you think,” said Charles Sheketoff, executive director of the public policy research institute. “While the Legislature calculated that the average taxpayer will be paying about $9.50 per month, the typical taxpayer will be paying significantly less.”
Download the full report (PDF).
The average tax is higher than the tax that will be paid by the typical Oregonian because the average is skewed by the very high incomes of relatively few Oregonians. “The typical Oregonian – the middle income Oregonian – earns significantly less than the wealthiest Oregonians and pays less in taxes each year,” said Sheketoff. Middle income Oregonians earn between $28,000 and $43,000 each year, while the top one percent average about $800,000 each year.
Some of the tax increase will be offset by reduced federal taxes. Taxpayers that itemize will be able to deduct their increased tax liability when calculating their federal income taxes. “The federal government essentially picks up about one-fifth of the cost of the tax increase,” said Sheketoff.
“A majority of Oregonians will, on average, see their taxes increase by less than $3 a month,” said Sheketoff. “As the election draws near they will have to weigh that small cost against the massive budget cuts to education, health care, and other public services scheduled to occur if the measure fails.”
Sheketoff noted that in the fifth special session the Legislature adopted $310 million in budget cuts that will go into effect if Measure 28 does not pass. The cuts were included in House Bill 5100.
The Oregon Center for Public Policy is a non-profit, non-partisan research institute that addresses budget, tax and other issues important to low and moderate income Oregonians, the majority of Oregonians.