Whatchamacolumn: Salem overreaches with new payroll tax

In classic government overreach style, Salem City Council last week approved a payroll tax of 0.814 percent on the earnings of people doing work inside the Salem City limits, regardless of their residency or usual workplace.

Apparently, that includes a News-Register sports reporter covering a game in Salem; a local nonprofit executive lobbying a bill at the Legislature; a UPS driver making deliveries while weaving in and out of city limits. Rule-making will lead toward a July 2024 effective date, but many visualize workers having to carry stopwatches and city limit maps to determine legal tax amounts.

Outraged responses came immediately from taxpayers and business representatives. Oregon Business and Industry, the state’s largest business association, quickly filed and distributed petitions seeking to refer the law to Salem voters. News stories and negative commentary spread across Oregon and are going national.

It’s not the first such tax — similar taxes exist for statewide and individual transit districts. But this one, dedicated to emergency services, seems to have drawn a “camel’s back” response that is unsympathetic to major budget deficits created by Salem.

OBI called the new tax “a significant burden for employees” and “a significant compliance burden” for employers. OBI President and CEO Angela Wilhelms summed it up, saying, “At a minimum, the community deserves a chance to vote.”

Salem City Council probably should be working on alternative budget solutions.

Former President Ronald Reagan once expressed a sentiment that has stood the test of time: “I have always thought of government as a kind of organism with an insatiable appetite for money, whose natural state is to grow forever unless you do something to starve it.”

On the national stage, neither conservatives nor liberals have done anything to control annual deficits or the soaring federal debt. In March, Cato Institute tax and budget expert Chris Edwards wrote:

“Fiscal discipline has collapsed since 2000 … Nondefense spending in 2023 is 18.6 percent of GDP, up from 12.6 percent in 2000 … Nondefense spending of 18.6 percent of GDP this year is $4.9 trillion. If we had restrained spending to the Clinton level of 12.6 percent, we would have saved $1.6 trillion this year, enough to wipe out the deficit and balance the federal budget.”

In Oregon and across the country, state governments, counties, cities, school districts and other governmental units focus more on raising revenue than on reducing expenses, boosting service levels but often with excessive costs. Currently, in that regard, all eyes are on Salem.

Jeb Bladine can be reached at jbladine@newsregister.com or 503-687-1223.