To the Eugene City Council:
You must reconsider the new payroll tax you are about to pass for public safety improvements.
The payroll tax is already one of the most regressive of all taxes. To add to the burden of low- and middle-income citizens in a time of economic inequality not seen in over 100 years is beyond tone deaf. The wealthy will barely notice this tax, but lower income families will miss every dollar, especially if the state enacts its tax on business revenues.
Incomes for low- and middle-income taxpayers have stagnated or even fallen since 1980 while the incomes of the top 1 percent have soared.
According to the Oregon Center for Public Policy, incomes for the top 1 percent in Oregon, now over $1 million per year, have increased by nearly $700,000, adjusted for inflation, since 1980, or about 200 percent.
How have middle income taxpayers fared in Oregon? Since 1980, the median income has increased by $1,850, or about 5.5 percent adjusted for inflation. That’s not 5.5 percent per year. That’s a total of 5.5 percent over nearly 40 years.
According to reporting by Bloomberg, the average Trump tax cut received by the top 1 percent was $62,000 per year. Contrast this with middle income taxpayers, who got an average tax cut of $1,090 per year, or about $20 per week. Courtesy of Mr. Trump, middle income taxpayers can enjoy a couple of extra lattes per week.
Why do you want to tax people whose incomes have stagnated for years and got a latte for a tax cut, while hardly touching people who have an extra $62,000 in their pockets every year and whose inflation-adjusted incomes have tripled since 1980?
For starters, you should exempt at least the first $132,900 of income from this new tax. That’s where people who earn more stop paying the 6.2 percent social security tax. This will provide much-needed protection for all low-income workers and much of the middle class.
But this doesn’t quite make up for the vast chasm that has opened between the top 1 percent and the rest of us. Starting at incomes of $400,000, where the top 1 percent starts in Oregon according to official income tax statistics, you should enact a much larger payroll tax. That will make up for exempting lower income workers and make your tax much fairer.
Most recently fueled by the Trump tax cuts, a torrent of wealth has flowed to the very rich over the last 40 years, entirely bypassing the middle class. Your proposed tax would add to this inequity in the cruelest possible way: taxing even the lowest income workers.
Take a stand against inequality. Do not pass your payroll tax in its current form. Give the middle class a long-overdue break. Tax the people who can afford it, not those who have struggled for a generation just to stay even, or worse.
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