New Preschool for All Data Challenges Idea That Wealthy People Are Fleeing County

"Recently-released statistics, however, show the number of high-income households paying the tax increased by roughly 14 percent in 2024 compared to the year prior. While there's still not enough data available to support sweeping conclusions about Preschool for All (PFA), the 2024 data suggests the number of high-income earners in Multnomah County bounced back after a dip in 2022 and 2023."

"The Preschool for All program was adopted by county voters in 2020 and went into effect in 2021. It's funded with a marginal income tax on Multnomah County's highest earners, starting with a 1.5 percent tax on earnings above $125,000 (single filers) or $200,000 (joint filers). The tax rate increases to 3 percent for earnings above $250,000 for single filers, and $400,000 for those filing jointly."

"That dip may have been caused in part by people filing their taxes late, or experiencing fluctuations in income. The marginal tax rate means the majority of the program's revenue is paid by filers earning more than $500,000 annually. So it was noticeable when, in 2022, the number of filers from that category declined by roughly 14 percent compared to the year before."

Multnomah County's Preschool for All program, funded by a marginal income tax on high earners starting at 1.5 percent on earnings above $125,000, experienced fluctuations in high-income filer participation. County data from 2022-2023 showed a concerning 14 percent decline in the highest-income earners, prompting concerns the tax was driving wealthy residents out. However, 2024 statistics reveal a 14 percent increase in high-income households paying the tax compared to 2023, suggesting the earlier decline may have resulted from late tax filings or income fluctuations rather than permanent relocation. The program, adopted by voters in 2020 and implemented in 2021, generates most revenue from filers earning over $500,000 annually.

Read at Portland Mercury