Reply to anti-tax letter | Dismounting Our Tiger

A few days ago I received a letter from Carol Leuthold opposing Measures 66 and 67. This letter has apparently been received by most voters in Oregon and it is deceptive in the extreme. I suspect it’s merely an opening salvo in a well funded campaign of obfuscation and fear mongering.

Background: Oregon’s Legislature has struggled to balance its budget and did so with severe cuts in public services and two modest tax increases, one on businesses and the other on the highest personal and corporate incomes. The tax increases have been submitted for a public referendum in January as Measures 66 and 67. What seems like a no-brainer is, of course, faced with selfish opposition heavily funded by large corporations and their lobbying groups. Although the fig leaf is to benefit the organizations, the reality is that their highly paid executives are able to delegate funds to this cause whether or not it does. In essence, they seek to avoid the personal tax increases of Measure 66, and fund the campaign against it at no personal expense. I applaud their clever misuse of business resources. Among the opponents funding sources are Weyerhauser (with highly paid executives in Oregon) and the Oregon Bankers Association (whose banking executives seem to have as much concern for public welfare as Goldman Sachs) as well as individuals such as Carol Leuthold, who may or may not have provided any hard cash.

I have mailed the following reply to Carol Leuthold.

Carol Maria Leuthold
Leuthold’s Wilsona Dairy
2425 McCormick Loop
Tillamook, OR 94141

Dear Carol:

Have received and read your letter urging a NO vote on Measures 66 and 67. I don’t know if you really believe everything in the letter, or if you merely lent your name to an anti-tax organization funded by Weyerhauser, Oregon Bankers Association and other big businesses in Oregon. Since, the letter contains errors in fact as well as unsubstantiated fear mongering, which is the bread and butter of anti-government groups, I hope that you naively lent your name and are really a more intelligent person and a more concerned citizen than the letter makes you out to be.

I too created small businesses ―in the electronics industry ―and was CEO of one of them for 16 years. (You can find substantiating information on my web page at www.elew.com) My companies were in California where taxes were much higher than in Oregon. Even in the 1960’s the minimum annual corporate “fee” was $100… equivalent to over $300 in today’s dollars. We also paid substantial property taxes on our inventory of finished goods, work in process and raw materials as well as hefty sales taxes. We thrived by accepting these taxes as costs of business and by getting on with the job at hand.

State Government provides critical services that enable your dairy farm to operate: a legal system that supports and enforces property rights and maintains public tranquility, an education system that supplies qualified workers, part of the transportation system that enables you to receive raw materials and ship products to non-local markets around the state. Businesses in Oregon, particularly the large ones, have been getting a free ride for most of these services; which are there whether or not the businesses are well managed or generate profits. Measure 67’s taxes and fees, $150 for businesses doing less than $500k per year and $100,000 for those doing over $100 million per year, are chicken feed and more than justified by the benefits of state services.

The letter incorrectly claims that “State Government has not tightened its belt like the rest of us.” In reality, funding for schools, the legal system and the transportation system has been severely cut already. I have two grandchildren attending Portland schools which, in the last year, have reduced the number of school days and increased class sizes (both of which will produce more poorly educated adults in the future) because of state funding cuts. Funding for State troopers has been reduced, risking public safety. Highway funding has been cut. Federal stimulus money has temporarily ameliorated much of the job loss and road deterioration from state funding cuts.

Another bogus claim “these tax increases will cost 70,000 Oregonians their jobs.” Show me the economists you refer to and their assumptions and I’ll show you a completely phony analysis. Tax money pays for jobs. At worst, progressive tax increases are job neutral. They are job creating when they tax the upper quartile of income, whose job multiplier is lower than those of lower quartiles. Measure 66 is clearly a job creating tax. That is a structural matter, not one of class and one that I’m prepared to demonstrate in a public debate or private correspondence with any economist. Even President Obama’s remark about avoiding tax increases during a recession is incorrect. Certain tax increases are job creating.

I could easily dispute the rest of the letter, but if the preceding hasn’t caused you to at least reconsider putting your name on it, then it must accurately reflect your character and your frame of mind. In that case, rational discussion and appeals for public safety and educating children are futile.

Sincerely,

Ed Lee

After writing my reply, I did a Google search that revealed some interesting things about its alleged author. The tax increase on their Dairy will be $140 per year! Now that’s a serious blow! Also, she and her husband make lots of money from other sources and frequently indulge in global travel. Methinks the tax increase on the well-to-do may be her primary motivator. So much for accurately representing oneself and ones motives.

I’ll post any response to my letter and, in the near future, will post the letter that might have been sent out if Carol or the other the anti-tax people were forced to speak truthfully while advocating their position (as in Jim Carrey’s comedy “Liar! Liar!). It will be painfully laughable, I promise.

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