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No Contest: Why expanding the Earned Income Tax Credit is better for working families and Oregon than the Tax Bracket Increase

August 26, 2008

Next year (2009), the Oregon Legislative Assembly may face two different income tax measures purporting to help working families.One plan, proposed by Republicans in the legislature, would double the size of Oregon's two lowest income tax brackets, doubling the share of income that is taxed at 5 and 7 percent (hereinafter, the "Tax Bracket Increase"). The other plan, proposed by Oregonians for Working Families, would expand Oregon's Earned Income Tax Credit (EITC) to 18 percent of the federal EITC. Which proposal is better? Read our latest issue brief No Contest: Why expanding the Earned Income Tax Credit is better for working families and Oregon than the Tax Bracket Increase or here in PDF.

No Gain, Just Pain: Most Oregonians would not benefit from Measure 59, but they would lose public services

August 18, 2008

Imagine being offered the following deal: in exchange for more overcrowded classrooms, more Oregonians without health coverage and higher college tuition, you get . . . nothing. That is not a hypothetical scenario for most Oregonians. It is the raw deal contained in Measure 59 on the November 2008 ballot. Measure 59, which would allow an unlimited deduction of federal income taxes on state tax returns, offers no tax break to more than three out of four Oregon taxpayers. And yet the measure's hefty price tag -- more than $1 billion, or more than about 9 percent of General Fund revenues, each budget cycle -- would force deep cuts in Oregon's public structures. Voters rejected a similar scheme in 2000. Like its earlier version, this year's reincarnation of the unlimited federal tax deduction portends no gain, just pain for most Oregonians. Read OCPP's latest report No Gain, Just Pain: Most Oregonians would not benefit from Measure 59, but they would lose public services. Read OCPP's news release Costly Ballot Measure 59 Tilts Benefits to Wealthy, Leaving "No Gain, Just Pain" for Most Oregonians.

Expanding the EIC in 2009: Increasing the state Earned Income Credit would add fairness and help low-wage working families and communities across Oregon

March 26, 2008

This tax season, Oregon will require a minimum wage worker who was employed full-time, year-round last year and supported one child to pay about $321 in state income taxes. That's equivalent to about a month of food for this hard-working but financially insecure family. Oregon's Earned Income Credit, enacted in 1997, has certainly helped Oregon's most vulnerable families. Because the credit is so small, though (it's one of the nation's smallest among states with such credits) Oregon income taxes are still taking a month's worth of food off the table of vulnerable families. By expanding the Earned Income Credit (EIC), Oregon can give a hand up to low-wage working families, rather than leaving them behind. Read OCPP's fact sheet, Expanding the EIC in 2009, which includes tables and maps showing EIC returns as a share of all returns by state legislative district.

Where Will the Pain Be? OCPP's subprime maps can help legislators target education about foreclosure scams addressed by HB 3630

February 19, 2008

The U.S. home loan market is failing in spectacular fashion. A housing bubble created partly by lax consumer protection laws has burst, sending delinquencies and foreclosures soaring and hobbling the national economy. While Oregon has so far avoided the worst of the crisis, recent trends are worrisome. Home prices have turned negative in a rising share of neighborhoods and delinquencies are surging. Oregon's housing troubles may only get worse.Driving the housing market's collapse are subprime loans, high-cost loans often issued to borrowers with impaired or no credit history. As of the third quarter of 2007, payment was past due on more than one in ten subprime loans in Oregon, and the delinquency rate on these loans was rising.Policymakers and elected leaders can best ameliorate the impact of rising subprime delinquencies if they know where subprime loans are concentrated. For instance, the Oregon Legislative Assembly is debating HB 3630, which would establish new consumer protections for borrowers facing foreclosure. If the bill becomes law, legislators and the Oregon Department of Consumer and Business Services could target public education efforts about the new law in neighborhoods at higher risk for foreclosures.But where are the potential trouble spots? OCPP has developed maps showing the concentration of subprime loans by census tract for each state legislative district (see appendix).Among legislative districts with the highest share of subprime mortgage originations in 2006 were those of legislative leaders: Senate President Peter Courtney (36.9 percent), Senate Republican Leader Ted Ferrioli (31.4 percent), and House Speaker Jeff Merkley (35.7 percent). Even in the district with the lowest share of subprime loans, Representative Sara Gelser's House District 16, one in eight residents who took out a home loan in 2006 (13.0 percent) received a subprime loan.Of course, factors besides subprime loans impact the foreclosure rate. These include declining home prices, a weak local economy, or a high concentration of risky mortgage products besides subprime loans. But with subprime loan delinquencies already high and rising, census tracts in which these loans are concentrated should concern policymakers and those seeking to ameliorate the problem through public education and other means.