The Oregon Legislature appears ready to pass new taxes to raise $2 billion for our underfunded schools. There’s no question the needs are there.

That said, it is fair to examine where the $2 billion comes from and who will ultimately pay.

Legislative leaders are once again proposing new taxes on business. They have outlined two possibilities, which they describe as a commercial activities (“CAT”) tax and a value-added (“VAT”) tax. Some translation is in order.

A CAT tax is a resurrection of a tax proposal put forth a while back by the public employees’ unions in the form of Measure 97. Soundly defeated by the voters, Measure 97 would have raised billions by taxing the gross receipts of Oregon businesses. Voters correctly figured out that businesses would pass most of this tax to the consumer, making it a stealth sales tax with no good way to exempt essentials like food and medicine.

A VAT tax is a tax paid by every business that touches a product from manufacture to the consumer. Think sales tax, but on steroids, with the same problems as the CAT tax.

At a time when economic inequality is the highest it has been in over a century, taxes on consumption, like the proposed taxes, make no sense. They hit low and middle income people the hardest, making them one of the most regressive of all taxes.

Even billionaires like Warren Buffet, Jamie Dimon, and Ray Dalio are expressing alarm as the economic gap continues to widen, fueled by the Trump tax cuts. Why do they care? They understand that there is a tipping point when economic inequality begins to corrode society. They understand that large swaths of people who have tired of economic hardship could lose faith in the system, take to the streets, and elect radical, even unstable leaders. And they understand that could lead to social and economic catastrophe.

Our leaders can no longer ignore these realities.

There are better ways to raise money for schools. The Trump tax cuts for individuals went almost entirely to the wealthy. Bloomberg reported the top 1 percent received an average tax cut of $62,000 per year. Contrast that with middle income individuals who got an average break of $1,090 per year, or about $20 per week. Courtesy Mr. Trump, middle income taxpayers can enjoy a couple of extra lattes per week.

Our leaders have a choice. Do they tax people whose incomes have stagnated for years and got a latte for a tax cut? Or do they tax the wealthiest Oregonians whose incomes have risen dramatically and now have an extra $62,000 per year in their pockets?

The path is clear. The legislature should establish new, higher Oregon income tax rates for the wealthiest 1 percent of Oregonians. Claw back some of that $62,000 to fund our schools and finally make our income tax less regressive.

Here’s another idea. Workers who make up to $132,900 per year pay 6.2 percent of their gross income into social security. But after income exceeds that amount, no social security tax is paid. That means if an individual earns $1 million per year, their effect payroll tax rate is 0.82 percent instead of the 6.2 percent that most people pay.

Legislators should pass a 6.2 percent payroll tax on the top 1 percent of incomes, correcting an enormous inequity and likely going a long way to raising the funds needed for our schools.

There was a time when ideas like these were considered radical. But times have changed, and quickly. We are at a crossroads. Legislators can continue to roll out the same old tired, tone-deaf ideas, or they can begin to understand what Warren Buffet et al. understand: one penny of new taxes on the middle class is too much when the wealthiest among us are left untouched.