Families See Two Sides to Tax Cuts

Many Americans are of two minds about the federal tax cuts that are moving through Congress.

They would dearly like to have a few hundred more dollars in their pockets. The stumbling economy has left many with credit card balances they have neglected, home repairs they have deferred or vacations they have postponed.

But at the same time, they are leery of what the tax cut might do to the nation as a whole. The federal deficit is soaring, and local government services are being cut -- police forces trimmed, school hours shortened, library doors closed.

A congressional committee will try this week to find a compromise between versions of President Bush’s tax cut plan passed by the House and Senate. As the committee was getting ready for business, Times reporters interviewed three families about their views of taxes and spending.

It’s not a scientific sample, just three voices in a vast country. Although the families are geographically and financially diverse, they expressed views that are remarkably consistent.

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PORTLAND, Ore. -- In one of the most tax-resistant corners of the country, Michelle and Terence Winningham have made their stand. After much debate over the kitchen table, the couple voted “yes” on Oregon’s first-ever county income tax.

The mail-in votes will be tallied Tuesday, and if Measure 26-48 passes, residents of Multnomah County -- which comprises Greater Portland -- will pay an extra 1.25% in income tax. For the Winninghams, it will mean paying an additional $800 in taxes for each of the next three years.

The couple voted for the measure despite great reluctance, despite already feeling “taxed to death.” They voted for it, they said, because they knew how the money was going to be used: to save Portland’s ailing schools.

You would think the Winninghams would welcome President Bush’s federal tax cut plan, now winding its way through Congress. Such a cut could offset the new local tax, but the couple, like many in this Northwest city of 529,000 people, doesn’t understand, or even seem interested in, the Bush plan.

“There’s been so much rhetoric,” Michelle Winningham says. It’s not clear to her how the plan will play out in the lives of ordinary people. Terence Winningham is more blunt. He says this tax cut, like past federal tax cuts, will amount to “jack squat.”

Terence Winningham, 40, works as lead carpenter for a construction company. Michelle, 37, runs a business out of their home. She is a marketing consultant to design and construction firms. The couple earned $72,000 last year, roughly $22,000 more than the median income in Portland.

They have two children, Amanda in seventh grade and Calvin in fifth grade. Both are in public schools. The family lives in a modest ranch-style home with four bedrooms and one bathroom. The house sits on three-quarters of an acre abutting a thickly forested hill called Powell Butte in east Portland.

They bought the property 14 years ago for $60,000, and they have only seven years left to pay off the mortgage. Their monthly mortgage payment is less than $1,000 a month. The couple can afford a bigger, more expensive house, but has consciously decided, Michelle Winningham says, to live within and even below their means.

They have little debt, their cars aren’t fancy (a 1999 Dodge Caravan and a 1992 Suzuki Sidekick), and they work on improving their home on a “pay-as-we-go basis,” often using recycled or surplus material from her husband’s construction jobs.

Winningham is proud of the new gardening shed in the backyard made up entirely of recycled material, including discarded doors and windows. Her recycling mentality, she says, came from her upbringing in a farming family, where use is made of every little thing.

The frugal lifestyle protected the Winninghams from the vicissitudes of the economy -- at least until a few years ago, when school budgets were being cut because of a state funding crisis. Between 1999 and 2002, Michelle Winningham says, neither of her children’s classes at Harold Oliver Intermediate School could afford science books.

Then, in the middle of this school year, the Centennial School District, to which her children’s schools belong, cut five days from the academic year. This as Michelle Winningham already worried that her kids were not getting enough classroom time.

According to the Oregon School Boards Assn., 90 of the state’s 198 districts have cut school days this year, and 31 of those districts offer fewer instructional hours than what the state has established as a minimum standard.

In January, a measure increasing the state income tax to bolster Oregon’s beleaguered schools failed, even though voters in Multnomah County overwhelmingly favored it. So Portland leaders got the idea of proposing a county income tax to help Multnomah County school districts, responsible for 40,000 students.

If Measure 26-48 doesn’t pass on Tuesday -- it’s predicted to be a close vote -- officials could cut as many as 650 teacher jobs, increase class sizes by an estimated 25%, and drop numerous school programs.

Winningham says her son would have to do without a band teacher next year, and his school would drop the weeklong Outdoor School program that daughter Amanda enjoyed so much.

“How do we think it’s OK to make our children second-class citizens in terms of education?” Michelle Winningham asks.

The couple voted for the county tax measure partly out of civic concern for local schools, but mostly out of personal concern for their children. Michelle says she refuses to “sacrifice” her kids to the hope that legislators come up with some long-term fix down the road.

The county tax debate has all but used up the tax talk in the Winningham household. There’s been little energy expended on tracking the federal tax cut plan that, according to Terence Winningham, seems “insignificant.”

He says he’s judging from past tax cuts.

Two years ago, Congress adopted a $1.35-trillion, 10-year tax cut at Bush’s insistence. It passed a smaller tax cut to stimulate the economy last year. Terence says of those cuts: “We saw nothing that resulted in anything significant. It’ll be the same this time. It’s just a lot of smoke.”