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.