Oregon Watchdog: Democrats propose tax increases on seniors, small businesses, personal income

OREGON HOUSE REPUBLICANS

FOR IMMEDIATE RELEASE: November 25, 2008
CONTACT: Nick Smith, 503-986-1351

DEMOCRATS PROPOSE TAX INCREASES ON PERSONAL INCOME,SENIOR CITIZENS, SMALL BUSINESSES
Legislative Concepts Phase Out Tax Credits for Rural Economic Development, Health Care

SALEM— Democrats last week proposed tax increases on personal income, senior citizens,
small businesses, and health care providers. They may also seek to eliminate dozens of tax
credits that promote economic development and services to seniors and other vulnerable
Oregonians.

The measures were adopted last week as bills sponsored by the Democrat-controlled House
Revenue Committee. The bills will be formally introduced when the new Legislature convenes
in January.

“Democrats quietly advanced these bills on the same day the Legislature received an alarming
economic and revenue forecast,” said House Republican Leader Bruce Hanna (R-Roseburg).

“The session hasn’t even started, and Oregonians are already facing dozens of tax increases.
During this painful economic recession, nobody’s pocketbooks will be safe next year.”

The Democrat-controlled committee advanced measures to raise personal income taxes by
creating a new 10 percent tax bracket (LC 1944), limiting the federal tax subtraction to $3,000
(LC 1721), and phasing out the personal exemption credit (LC 1305).

Democrats have also proposed legislation to increase the corporate minimum tax, and potentially
eliminate tax credits for workforce development, college scholarships and electronic commerce
in enterprise zones (LC 1305).

“Rural Oregon depends on the state’s enterprise zone program to promote economic
development,” Rep. Hanna said. “Eliminating these important tax credits would only deepen our
economic recession.”

To raise taxes on seniors, Democrats proposed capping the elderly medical deduction (LC 1309)
as well as phasing-out tax credits for elderly care, long term care insurance, retirement income
and credit for expenses in lieu of nursing home care (LC 1305). The Democratic legislation
would also create a new tax on health care providers (LC 1720), and potentially eliminate tax
credits for doctors serving rural Oregonians (LC 1305).

“We can’t protect Oregon’s senior citizens by raising their taxes and making it more expensive
for them to receive care,” Rep. Hanna said. “In addition, we can’t reduce the costs of health
insurance by taxing providers and making health care more expensive for rural Oregonians.”
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