05/31/2007

Associated Press

The rich might have to pay a little more in taxes to help the poor under a new bill proposed by state lawmakers.

The proposal introduced Wednesday by the House Revenue Committee would provide a bigger state tax rebate to working parents earning less than poverty-level wages.

A typical Oregon family of four earning near the poverty level — about $20,600 — paid $319 in state income taxes in 2006, said Michael Leachman, a policy analyst for the Oregon Center for Public Policy in Silverton.

Under the proposed bill, eligible families wouldn't pay anything.

"Essentially, it's going to eliminate income taxes for poor families," Leachman said.

The money would come from raising taxes on people earning more than $100,000 per year.

State Rep. Tom Butler, R-Ontario, the top Republican tax expert in the Legislature, helped craft the proposal, working with other lawmakers and advocates for the poor.

"I think it's doable," Butler said. The bill will help working families that are having trouble putting food on the table, he said.

The proposal would more than double the value of Oregon's earned-income tax credit, a tax break designed for working families. It would rise from the current 5 percent of the federal earned-income tax credit to 12 percent.

Some families also would also get checks from the state, if the credit topped the value of the taxes they paid. The feature, known as "refundability," was added to Oregon's tax code in 2005.

"They get the whole credit they're allowed, even if they haven't put that much in," said Patti Whitney-Wise, the executive director of the Oregon Hunger Relief Task Force.

To reduce the impact on the state budget, the House Revenue Committee is exploring phasing out the personal tax exemption for individuals earning more than $100,000 or families earning more than $200,000. Oregonians now get a personal exemption of $159 for each dependent or other exemption, regardless of income.

State Rep. Betty Komp, D-Woodburn, is one of two lawmakers who proposed beefing-up the earned-income tax credit. The former school principal once collected about $175 from the earned-income tax credit, when she was a single mother attending college to upgrade her skills.

"I know that it really helped me one time pay my electric bill and buy my groceries," Komp said.

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Eds: The proposal is HB2966.

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Information from: Statesman Journal, http://www.statesmanjournal.com