How to pay (PAE) for it? Tax the rich.

Fact Sheet
April 10, 2023By Nhi Nguyễn Download PDF

Making Oregonians more economically secure requires investing in our well-being: housing, education, child care, and more. One fair way to pay for these investments is to increase taxes on the highest-earning Oregonians, especially millionaires.

Good tax reform is progressive, adequate, and equitable (PAE)

Good tax reforms share three characteristics. They are progressive, asking proportionately more of the rich than the poor. They are adequate, meaning they raise enough revenue to support the public services Oregonians need. And they are equitable, helping reduce economic disparities that are the product of our nation’s history of racial and gender exclusion and oppression.

Progressive: Raising tax rates at the top advances tax fairness

Oregon’s tax system is upside-down. When you add up all state and local taxes, it turns out that the lowest-paid Oregonians pay proportionately more than the richest Oregonians. Raising tax rates on the rich would help make our tax system more progressive and equitable, while raising substantial revenue that can be used to improve the lives of all Oregonians.

Adequate: A modest tax rate increase targeted at the richest Oregonians would raise nearly 1 billion

A simple way to raise taxes on the richest Oregonians is to bump up the tax rate at the very top. Raising the current top tax rate to 11 percent for joint filers with income over $250,000 ($125,000 for single) would almost entirely land on the top 5 percent of Oregonians. Adding a millionaire’s tax, a new tax bracket of 13 percent for income over $1 million ($500,000 for single), would impact fewer than 1 percent of Oregonians — and only the very richest [1]. These changes would generate $976 million per budget period [2]. That is enough, for example, to hire an additional 9,000 teachers to help combat Oregon’s teacher shortage [3].

Equitable: Raising taxes on the rich makes the tax system more equitable

Taxing the rich can help address long-standing racial disparities. Due to centuries of discrimination and racist exclusion in our economy [4], Oregonians of color tend to have less income and are therefore less likely to be impacted by these tax increases. Furthermore, the richest Oregonians derive much of their income from wealth – ownership of stocks, property, and businesses – that is even more concentrated among white households [5]. Taxing the rich makes the tax system more equitable for all Oregonians — Black, brown, and white — while helping ease racial disparities.

[1] Estimates provided to OCPP by the Institute on Taxation and Economic Policy

[2] Estimates provided to OCPP by the Oregon Legislative Revenue Office

[3] Alex Baumhardt, Capital Chronicle, School staffing issues in Oregon called ‘real, emergency situation’, November 2021.

[4] Oregon Center for Public Policy, The Racist Roots of Oregon’s Tax System, November 2021.

[5] Robert Gebeloff, The New York Times, Rise in Inequality During the Pandemic, January 2021; Tim Smart, U.S. News and World Report, Who Owns Stocks in America? Mostly, It’s the Wealthy and White, March 2021