How Much do Tax Breaks Cost Oregon?

When Oregon lawmakers meet to hammer out a budget deal, their considerations basically boil down to two factors: How much will it cost to provide the services Oregonians need? How much money do we have to do this?

Sounds simple. But there’s often a gap between those answers. Why? Because one of the state’s fastest growing costs is the growth of tax breaks, which often go unchecked and ignored during these budget conversations. Because this is the cost of letting corporations and individuals deduct tax breaks, the state loses out on these funds from the revenue side — which means it’s certainly not available for the spending side. So if lawmakers are framing budget conversations with the question “How much money do we have,” they are completely missing out on the equally important: “How much money are we losing?”

taxbreaks

As it turns out, the answer is a lot, and it’s only growing. Tax breaks grew by $8 billion from 2007 – 2013. (That’s nearly 30% growth in just six years!)

Some lawmakers like to pretend that this isn’t a problem — after all,  it is hard to see what’s not there. But this is a real cost to the state, when tax breaks grow without checks and accountability. We’ve written about the tax break expenditures a handful of times before (see here and here) and note that we don’t advocate for eliminating all tax expenditures. Some are well designed to promote the public’s well being, such as credits for low-income families or real job growth promotion.

But many of these tax breaks are used by the wealthiest Oregonians and don’t fulfill the intended purpose. (Even the right-leaning Oregonian covered this phenomenon and found that of the tax expenditures they reviewed, “about half of it went to those in the upper fifth of the income scale.”)

And for what effect?

Seems like the real question lawmakers ought to be considering is: “Is it worth it?”

This image is a teaser of the full infographic we’ll share later this week. Stay tuned for the big reveal!

One Response to “How Much do Tax Breaks Cost Oregon?”

  1. michael roche

    Why did progressives not fight reducing $200 million in tax breaks for senior’s medical expenses and give the same amount to lobbyist’s, doctors ,lawyers and other alleged small business folks, who are quite capable of hiding income. Do you really believe that’s good policy. One medical disaster can break a family, even if they have a 100,000 income. Yet you will continue to demand tax increases for the middle class and support a Governor and Demo’s in bed with the Phil Knight’s of Oregon.

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