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Competing Philosophies Mark Income Tax Debate

Oregon voters will weigh in on a pair of budget-balancing tax increases in January.  The Secretary of State's office said Thursday that backers of the effort to get the measures onto the ballot have submitted enough valid signatures.

One of the tax hikes targets upper-income people.  Opponents say it will stifle productivity while supporters say it will restore fairness to the Oregon tax code. 

Salem Correspondent Chris Lehman went looking for some of the people who would actually pay this tax increase.

So, how do you find a rich person in Oregon?  I started my quest by standing on a street corner in Portland's Pearl District.

This is the part of town where you can easily spend ten thousand dollars on a Persian carpet or a work of art.

Even so, most of the people I spoke with here were among the 98 percent of Oregonians who don't make enough to pay the higher tax.  That would be a quarter million dollars for couples or $125,000 for individuals.

Chris Lehman: "Would you be numbered in the households with an income over $250,000?"

Diane Rios:  "No, I doubt I ever will be.  Barring some stroke of luck, no." 

That was Diane Rios, who was on her way to work at a nearby bookstore. 

Later, I caught up with one woman who was carrying a shopping bag from a high-end boutique. 

She said she and her husband do make enough put them in the tax bracket this tax hike affects.  But she wasn't too eager to give her name.

Unidentified woman:  "I'd rather not say."

Reporter:  "A little hesitant about that?"

Unidentified woman:  "Yes, just cause it's an unusual name and a lot of people would know who I am."

I was striking out in my attempt to interview rich people who weren't afraid to go on the record about it.  

So, I called the campaigns that are working for and against the tax hike.

Defend Oregon, which supports the increase, put me in touch with David Vernier.  He was a high school science teacher back in the 1980's.  He quit his day job to develop a line of educational computer programs. 

Vernier Software now inhabits a gleaming, environmentally-friendly office building in Beaverton.

David Vernier, giving a tour:  "This is the bike room.  We get quite a few bikers.  Everybody here has a transit pass, a free transit pass."

As it turns out, you can make a lot more money running a software company than you can as a science teacher.  Vernier wouldn't say how much he makes.  But he said it's well above the threshold for paying the new tax.

David Vernier:  "I qualify.  My wife and I qualify.  We've been lucky enough to have a good income for many years now.  So we understand that we will pay more taxes.  It's the price we pay for living in an organized society."

Vernier says he followed the Oregon Legislature's attempts earlier this year to bridge a four billion dollar hole in the budget.  The tax on upper-income people is part of the solution passed on a nearly party-line vote by majority Democrats. 

Vernier is willing to pay the consequences.

David Vernier:  "Sure, it's going to cost us some taxes.  But I need to have that highway patrolman on the road keeping the drunk drivers under control.  We want to have schools open."

Next, I called the group that's against the personal income tax hike.  They're called Oregonians Against Job-Killing Taxes.  That campaign pointed me in the direction of Jon Chandler.  He's the head of the Oregon Home Builders Association.

He says while he hasn't crunched the exact numbers, he expects he and his wife to pay significantly more under the new tax structure.  And he says that's just not fair.

Jon Chandler:  "When you're asking a very small number of people to bear a disproportionate burden of the taxes that benefit all of them, those rich folks, in quotes, they don't get the bulk of the benefit from whatever services are being paid for by this."

Chandler says that he can afford the extra hit to his wallet.  But he thinks targeting the rich is a form of class warfare.

Jon Chandler:  "There's about two percent of Oregonians that fall into that category.  And the other side says ëWell geez, there's only a handful of people.'  Well, that handful of people is already paying about 30 percent of the income taxes in this state.  They're already buying one in three cops, one in three school teachers, one in three busses.  I guess I'd like to know, at what point they've paid their share."

The personal income tax hike is projected to raise $472 million in the current budget cycle.  A separate corporate tax hike is expected to bring the state $261 million.

Now that referendum signatures have been verified, the two measures will be on the ballot in January.

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