Kitzhaber finds capital gains tax break a hard sale to lawmakers
There wasn't much that Gov. John Kitzhaber and his Republican challenger Chris Dudley agreed on during their gubernatorial face-off in 2010. But both candidates promised voters that they'd cut the state's capital gains tax rate.
For those unfamiliar with the state's tax code, Oregon is home to one of the nation's highest capital gains rates. Our upper bracket is 11 percent, tied with Hawaii for No. 1.
Kitzhaber seemed to be making progress in this area when we last checked. He'd just included a proposal to reduce the tax by about $25 million over two years in his budget. (For more info, just scroll down.)
It didn't work.
To make a long story short, the cut in the capital gains tax got tied to a proposal to reform Oregon's kicker law. For a moment, it seemed that the package, which also included a more robust state rainy day fund, would make it through the Legislature.
Then the Senate heard the House might not have the votes to pass the package. Rather than make politically sensitive votes for no reason, Senate President Peter Courtney kicked the bills to committee purgatory. They never emerged.
For now, this promise looks Stalled.
The Oregonian, "Kitzhaber, businesses applaud successes,” June 30, 2011
The Oregonian, "Kicker duo can"t find allies,” May 21, 2011
Kitzhaber includes modest cut in capital gains in budget proposal
Oregon is home to one of the nation"s highest capital gains tax rates (our upper bracket of 11 percent is tied with Hawaii"s for No. 1). It"s no wonder, then, that both the Republican and Democratic candidate for governor pledged last year to cut it if elected.
Republican candidate Chris Dudely said he"d cut the rate to 3 percent for two years beginning in 2011 and then raise it to 5 percent for the foreseeable future. Gov. John Kitzhaber was much more (perhaps purposefully) vague about how much he would cut the rate by. But cut it, he would.
With his budget proposal just released, we decided to take a look at the particulars and see if he seemed dedicated to making good on this promise. So far, it looks like he is.
In his accounting, the governor is including a reduction in capital gains taxes by about $25 million for the state"s next two-year budget. Granted, that"s a much smaller cut than what Dudley had advocated -- his cuts added up to about $400 million -- but it is a cut nonetheless.
What remains to be seen is whether this reduction actually makes it through the Legislature when the budget committee hammers out the details of the next biennium"s funding levels. For now, this is a promise In The Works.
Gov. John Kitzhaber, Proposed 2011-2013 Budget, February 1, 2011