tag:blogger.com,1999:blog-3471471289744825428.comments2024-03-11T00:31:41.186-07:00The Oregon Economics BlogPatrick Emersonhttp://www.blogger.com/profile/17242234148546323374noreply@blogger.comBlogger2159125tag:blogger.com,1999:blog-3471471289744825428.post-30233070605290084162017-04-04T10:56:42.336-07:002017-04-04T10:56:42.336-07:00Aside from the question of whether this policy wou...Aside from the question of whether this policy would help alleviate the housing crisis, what about looking at it from the standpoint of basic fairness. Couldn't you make the argument that if a landlord chooses to evict someone without cause, they should bear some of the cost to the tenant whose life is being disrupted? Andrea Clelandhttps://www.blogger.com/profile/06912447719993017509noreply@blogger.comtag:blogger.com,1999:blog-3471471289744825428.post-33600293464006999442017-01-19T09:30:56.742-08:002017-01-19T09:30:56.742-08:00Fred, how much revenue is sufficient to fund Orego...Fred, how much revenue is sufficient to fund Oregon’s infrastructure, schools, and public services at adequate levels? Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3471471289744825428.post-14564284187789366562016-12-16T11:29:10.372-08:002016-12-16T11:29:10.372-08:00Elsewhere, Jonathan Thompson noted in response to ...Elsewhere, Jonathan Thompson noted in response to my observation that"No doubt executive compensation plays a major explanatory role in the explosion in income inequality that has occurred over the past 30-40 years, "and noted that this claim is false. "The share of income going to the top 1% has roughly doubly according to the most commonly used data from 1979 and is now more than $3 trillion. As you point out the income of the Fortune 500 CEOs is only $5 billion combined and the income of the corporate boards of every corporation on the S&P 1500 is only around $20 billion. Even if those figures started at zero they explain a miniscule portion of the increasing share of income of the top 1% over the last forty or so years."<br /><br />I agree that he is correct in questioning the supermanager story, noting there are only 500 CEOs of Fortune 500 publicly traded companies – in fact there are only about 3,500 large publicly traded companies in the U.S., down from more than 5,000 in the mid-80s (altogether the census now reports fewer than 10,000 C corporations with 500 or more employees), whereas the real issue goes to the relative increase in the earned incomes of 160,000 households (the top .1 percent). <br /><br />My observation merely acknowledged Bakija, Cole, and Heim’s (2012) finding to the effect that “that executives, managers, supervisors, and financial professionals account for about 60 percent of the top 0.1 percent of income earners in recent years, and can account for 70 percent of the increase in the share of national income going to the top 0.1 percent of the income distribution between 1979 and 2005.” <br /><br />Top executives, managers, and supervisors working for publicly held, non-financial corporations did quite well during this period, increasing their share from 1.2 percent to 2.2 percent of total GNY, but their domination of the top 0.1 percent declined almost by half. In 1979 they took home 37 percent of the income earned by the top 0.1 percent of households; by 2005 their share had dropped to 21 percent. <br /><br />In contrast, financial professionals and managers (mostly not in C-corps) made out like bandits, increasing their share of the total from 0.4 percent to 2.1 percent, while their share of the income of the top 0.1 percent of households nearly doubled (the 25 highest-earning hedge fund managers in the United States took home >$20 billion in compensation in 2012, according to Alpha magazine, 4 times the amount earned by Fortune 500 CEOs) <br /><br />However, arguably the real winners were executives, managers, and supervisors working for privately held, non-financial enterprises. Their share of total income increased from 0.3 percent to 2.5 percent; they now take home nearly one dollar in every four earned by the top 0.1 percent of households. Most of these businesses are ‘pass-through’ enterprises: their income passes directly to their owners’ personal income tax returns. In contrast the income of C corporations is taxed twice, through corporate income taxes and then again through personal income taxes on dividends and capital gains. <br /><br />http://web.williams.edu/Economics/wp/BakijaColeHeimJobsIncomeGrowthTopEarners.pdf<br />fthompsohttps://www.blogger.com/profile/13953605115587300660noreply@blogger.comtag:blogger.com,1999:blog-3471471289744825428.post-88275319962712805832016-09-14T11:01:59.513-07:002016-09-14T11:01:59.513-07:00The Tax Foundation of tax triggers (including the ...The Tax Foundation of tax triggers (including the OR's kicker). http://taxfoundation.org/article/designing-tax-triggers-lessons-states?mc_cid=be351c2add&mc_eid=695bdd8064fthompsohttps://www.blogger.com/profile/13953605115587300660noreply@blogger.comtag:blogger.com,1999:blog-3471471289744825428.post-1840465927726589882016-08-05T11:35:34.956-07:002016-08-05T11:35:34.956-07:00LRO uses a Computable General Equilibrium (CGE) mo...LRO uses a Computable General Equilibrium (CGE) model adapted from CA's; PSU a commercial product. I know that the LRO didn't massage their numbers to get a preferred result; I don't think PSU did either, otherwise they wouldn't have been at sixes and sevens with Our Oregon, who really didn't like their results. My point was merely that estimating the DW losses of this proposal is a craps shoot. <br />fthompsohttps://www.blogger.com/profile/13953605115587300660noreply@blogger.comtag:blogger.com,1999:blog-3471471289744825428.post-50836405252880114912016-08-03T14:27:13.406-07:002016-08-03T14:27:13.406-07:00Fred,
Thanks for the clarification. I had not thou...Fred,<br />Thanks for the clarification. I had not thought of it that way. I hate to be a bit pedantic but they are still failing to take into account the cost of employee benefits. State employees have a rich medical plan for example. If they were not exempt it would fall into the Cadillac tax plan under the ACA. Plus the 7.5% tax the employer pays for Social Security. The cost of medical, dental, vision, disability, sick days, vacation, and life insurance could easily run another $15,000 a year for a $50,000 a year employee. (medical being the largest cost; and I do not begrudge any of those benefits to state workers ) I really think they massaged the numbers to come up with the "results" they wanted. Anonymoushttps://www.blogger.com/profile/07337447734937643086noreply@blogger.comtag:blogger.com,1999:blog-3471471289744825428.post-1831249291936185002016-08-02T15:58:55.211-07:002016-08-02T15:58:55.211-07:00Jim, I hear what you are saying. A lot of folks ar...Jim, I hear what you are saying. A lot of folks are skeptical of DGE models for those reasons. But, I evidently failed to male one point clear, the $30k figure is a product, what it costs to generate a job given an income multiplier for government spending between 1.7 and 2, the median incremental direct cost of employment is about $56K, which as you correctly note is a lot more than $30k, 1.7 t0 2 times more.fthompsohttps://www.blogger.com/profile/13953605115587300660noreply@blogger.comtag:blogger.com,1999:blog-3471471289744825428.post-54680952445733888552016-07-20T11:39:47.051-07:002016-07-20T11:39:47.051-07:00Thanks. I find it hard to believe that the cost of...Thanks. I find it hard to believe that the cost of a state job is only $30,000 a year. At $13 an hour the cost would exceed $30,000 a year ( $13 an hour is really a cost to the employer of $13.98 since they have to pay SS $13.98 X 2,280 (the hours the IRS considers a full-time worker works per year)-> $31,874. Being full time it is likely there are health insurance benefits and retirement benefits. Thus bringing the cost well above $30,000. In addition, for every "line" worker there is overhead in the form of managers and HR etc. As for the Keynesian multiplier, that is a stretch. I feel when PSU says "dynamic" it means we will fiddle with the parameters and assumptions to get the result we want. <br /><br />Thanks,<br />JimAnonymoushttps://www.blogger.com/profile/07337447734937643086noreply@blogger.comtag:blogger.com,1999:blog-3471471289744825428.post-37796974585129392282016-07-20T11:11:17.973-07:002016-07-20T11:11:17.973-07:00Jim, see my first paragraph. I was reporting on th...Jim, see my first paragraph. I was reporting on the LRO report, which was agnostic as to the economic benefits of state spending, aside from its direct effect on the input-output relations used in the ITEP model. The PSU analysis done for the supporters of IP-28 (M97) got a much more positive result employing a dynamic scoring model: its estimates imply a local income multiplier for government spending between 1.7 and 2, and a cost per job of $30,000 per year, which actually puts IP-28 ahead of the game..fthompsohttps://www.blogger.com/profile/13953605115587300660noreply@blogger.comtag:blogger.com,1999:blog-3471471289744825428.post-79153096724461910432016-07-18T12:22:35.563-07:002016-07-18T12:22:35.563-07:00I disagree that the net effect of moving employed ...I disagree that the net effect of moving employed from the private sector to the public sector is economically neutral. (I do not disagree with the numbers potentially lost in the private sector.) In general, in the private sector the employee's productivity is self-sustained by serving the public. (goods and services). If they do not then they go out of business. In the public sector, their pay comes from taking taxes from the private sector. In addition, it is difficult to reduce the size of the public sector once they are employed. So shifting workers from the private sector to the public sector is a double hit!Anonymoushttps://www.blogger.com/profile/07337447734937643086noreply@blogger.comtag:blogger.com,1999:blog-3471471289744825428.post-22328821562524503022016-05-12T09:48:08.840-07:002016-05-12T09:48:08.840-07:00Transparency could also be accomplished through an...Transparency could also be accomplished through and interstate compact, but I wouldn't hold my breath. http://www.oecd.org/tax/a-new-boost-to-transparency-in-international-tax-matters-six-new-countries-sign-agreement-enabling-automatic-sharing-of-country-by-country-reporting.htm?utm_source=Adestra&utm_medium=email&utm_content=A%20new%20boost%20to%20transparency%20in%20international%20tax%20matters%3A%206%20new%20countries%20sign%20agreement%20enabling%20au&utm_campaign=Tax%20News%20Alert%2012-05-2016&utm_term=demofthompsohttps://www.blogger.com/profile/13953605115587300660noreply@blogger.comtag:blogger.com,1999:blog-3471471289744825428.post-34480360984373645392016-05-02T10:51:02.072-07:002016-05-02T10:51:02.072-07:00Card: You wrote: "I seriously doubt that a si...Card: You wrote: "I seriously doubt that a significant portion of it is {related to illegally sheltering income from the state of Oregon} (which by the way is why we should avoid calling it tax evasion). At least not $50-$100 million of it. I suspect a significant portion of the $200 million is legally shifted from Oregon in one way or the other. Accountants make a lot of money helping corporations engage in legal tax planning." Maybe, but I'd like to see what's behind the base erosion. In 2010, the federal CIT tax base was $900B net, the output weighted mean statutory state CIT rate was about 6.1%, but states only collected about $3,0-$3.3B in CITes. Moreover, based on my work with the DOR, I am inclined to believe that states are pretty much stuck with accepting whatever corps tell them about factor apportionment. Reporting on a comprehensive 50 state-by-state basis, would go a long way to resolving this question. Besides, if it wouldn't matter very much, why are corps so adamantly opposed to this proposal?fthompsohttps://www.blogger.com/profile/13953605115587300660noreply@blogger.comtag:blogger.com,1999:blog-3471471289744825428.post-50766092789949411102016-04-30T11:11:21.707-07:002016-04-30T11:11:21.707-07:00Hi Fred. Just some thoughts I had while reading th...Hi Fred. Just some thoughts I had while reading the blog post.<br /><br />It sounds to me like you believe Mike Mazerov's and your proposal would help Oregon recover a significant portion of the $200 million missing do to tax planning while at the same time your proposal (and perhaps Michael Mazerov's, though I admittedly haven't had time to read it all) only calls for for more transparency in state-by-state tax reporting.<br /><br />While I understand how this would help if the $200 million was related to illegally sheltering income from the state of Oregon, I seriously doubt that a significant portion of it is (which by the way is why we should avoid calling it tax evasion). At least not $50-$100 million of it. I suspect a significant portion of the $200 million is legally shifted from Oregon in one way or the other. Accountants make a lot of money helping corporations engage in legal tax planning. So for transparency to have a significant effect, I think we would need to see changes in Oregon's tax policies as well.<br /><br />For example, the OECD's BEPS Initiative has moved towards country-by-country reporting, basically the same transparency idea. However, with it they've pushed other changes to attempt to close tax loopholes.<br /><br />From BEPS' website: "“Treaty shopping” generally refers to arrangements through which a person who is not a resident of one of the two States that concluded a tax treaty may attempt to obtain benefits that the treaty grants to residents of these States. These strategies are often implemented by establishing companies in States with desirable tax treaties that are often qualified as “letterboxes” “shell companies” or “conduits” because these companies exist on paper but have no or hardly any substance in reality. It can be addressed through changes to bilateral tax treaties in line with the minimum standard agreed in the context of the BEPS Project." http://www.oecd.org/ctp/beps-frequentlyaskedquestions.htm<br /><br />Note that they are specifically calling for changes to the tax treaties to prevent this issue. Country-by-country reporting would make it more obvious to taxing authorities that this is happening, and thus would aid in writing tax law, but "treaty shopping" isn't illegal, so knowing it is happening wouldn't increase taxes collected.<br /><br />A more concrete example from the same website: "Hybrid mismatches are cross-border arrangements that take advantage of differences in the tax treatment of financial instruments, asset transfers and entities to achieve “double non-taxation” or long term deferral outcomes which may not have been intended by either country. A common example of a hybrid financial instrument would be an instrument that is considered a debt in one country and equity in another so that a payment under the instrument is deductible when it is paid but is treated as a tax-exempt dividend in the country of receipt."<br /><br />Again, while this outcome "may not have been intended," the legal structure of the debt/equity isn't tax evasion, its within the bounds of the law. So the law has to changes to have an impact on taxes collected.<br /><br />As you note, moving away from the single-factor apportionment could get Oregon $74 million of the $200 million, but I think tax code changes beyond simply transparency in reporting would be needed to collect almost any of the other $200 million.<br /><br />One interesting thought I had while writing this is, "would knowing they are facing increased transparency cause corporations to engage in less aggressive tax planning?" My guess is no, as its only state and federal tax authorities who would know, not the general public, but interesting to think about none the less.CardKaptorhttps://www.blogger.com/profile/15398132652174026207noreply@blogger.comtag:blogger.com,1999:blog-3471471289744825428.post-59353757470253617492016-01-20T16:35:01.207-08:002016-01-20T16:35:01.207-08:00Nice to see you back, Patrick. We missed you.Nice to see you back, Patrick. We missed you.fthompsohttps://www.blogger.com/profile/13953605115587300660noreply@blogger.comtag:blogger.com,1999:blog-3471471289744825428.post-22552609944905688042016-01-02T15:30:23.863-08:002016-01-02T15:30:23.863-08:00Is there a lobbying group or someone actively work...Is there a lobbying group or someone actively working on this? I recently moved to OR, and basically think this policy is idiotic. It results in taking me more time than it should, and a generation of Oregonians who apparently think creating jobs that no one is willing to pay for (in the form of higher prices for full service, as evidenced nationwide) is a good idea. <br /><br />Would love to financially contribute to any lobbying group working to overturn this arcane and counterproductive rule.dasvisionhttps://www.blogger.com/profile/11409832476339164256noreply@blogger.comtag:blogger.com,1999:blog-3471471289744825428.post-77831168901501046152015-11-16T20:15:38.279-08:002015-11-16T20:15:38.279-08:00Apologies for the typos, especially Chuck Sheketof...Apologies for the typos, especially Chuck Sheketoff's last name.fthompsohttps://www.blogger.com/profile/13953605115587300660noreply@blogger.comtag:blogger.com,1999:blog-3471471289744825428.post-38162858696830811882015-09-15T19:17:19.496-07:002015-09-15T19:17:19.496-07:00Check this out: http://www.reneworegon.org/big_oil...Check this out: http://www.reneworegon.org/big_oil_addicted?recruiter_id=427&utm_source=facebookad&utm_medium=addicted_video#fthompsohttps://www.blogger.com/profile/13953605115587300660noreply@blogger.comtag:blogger.com,1999:blog-3471471289744825428.post-66011193347650545682015-08-28T10:54:28.895-07:002015-08-28T10:54:28.895-07:00Oops, no it should read "End the ban..."...Oops, no it should read "End the ban..."<br /><br />Thanks!Patrick Emersonhttps://www.blogger.com/profile/17242234148546323374noreply@blogger.comtag:blogger.com,1999:blog-3471471289744825428.post-89909417380352437002015-08-28T10:44:26.065-07:002015-08-28T10:44:26.065-07:00This comment has been removed by the author.Anonymoushttps://www.blogger.com/profile/06914168967401672142noreply@blogger.comtag:blogger.com,1999:blog-3471471289744825428.post-30325487500325664812015-07-15T17:20:49.712-07:002015-07-15T17:20:49.712-07:00I want to correct a misreading of this post. It ha...I want to correct a misreading of this post. It has come to my attention that some readers believe that I implied that the bio-diesel interests supporting the Clean Fuels Program are mob controlled. Nothing could be further from the truth – that possibility never crossed my mind. While I have subsequently learned that the fats, oils and greases collection and refining industry is evidently run by organized crime in some parts of the U.S., I wasn’t aware of this when I wrote the “bootleggers and Baptists” post. In any case, I certainly did not mean to imply that any of the supporters of the Clean Fuels Program are crooks, merely that some of them have a decisive financial stake in the program’s survival.fthompsohttps://www.blogger.com/profile/13953605115587300660noreply@blogger.comtag:blogger.com,1999:blog-3471471289744825428.post-46069502505268231082015-07-04T19:26:33.569-07:002015-07-04T19:26:33.569-07:00It's complicated: http://oregoncatalyst.com/31...It's complicated: http://oregoncatalyst.com/31200-shady-interests-control-oregon-environmental-groups.html#more-31200fthompsohttps://www.blogger.com/profile/13953605115587300660noreply@blogger.comtag:blogger.com,1999:blog-3471471289744825428.post-86594350400755264452015-06-29T19:34:03.982-07:002015-06-29T19:34:03.982-07:00Plus Trade promotion Authority passed and the ACA ...Plus Trade promotion Authority passed and the ACA was upheld without reliance on Chevron. These aren't as big, but still nice.fthompsohttps://www.blogger.com/profile/13953605115587300660noreply@blogger.comtag:blogger.com,1999:blog-3471471289744825428.post-14580251553931350622015-06-26T16:03:58.599-07:002015-06-26T16:03:58.599-07:00Rightt, Walker. I meant to type: "Oregon Envi...Rightt, Walker. I meant to type: "Oregon Environmental Council are the good guys...." Sorry I didn't catch this sooner.fthompsohttps://www.blogger.com/profile/13953605115587300660noreply@blogger.comtag:blogger.com,1999:blog-3471471289744825428.post-12958835372684869562015-06-21T17:34:21.677-07:002015-06-21T17:34:21.677-07:00This must be an ice cream thing. The best place he...This must be an ice cream thing. The best place here in Baltimore charges $3.50 / $5.00 / $7.50. The owner just kind of looked at me strange when I asked why that third scoop cost so much. The Oriole Wayhttps://www.blogger.com/profile/16483309131692836436noreply@blogger.comtag:blogger.com,1999:blog-3471471289744825428.post-26173771381125102122015-06-20T16:59:43.637-07:002015-06-20T16:59:43.637-07:00Typo ... Isn't it Oregon Environmental Council...Typo ... Isn't it Oregon Environmental Council with the business allies in that near to the end paragraph?Walkerhttps://www.blogger.com/profile/12731260619465817652noreply@blogger.com