Among the many new taxes passed by the 2009 Oregon Legislature was a 1 percent "surcharge" on certain health insurance premiums. The money raised is supposed to be used to add more people to the Oregon Health Plan, which is our state's Medicaid plan for the low income.

Insurers have the option of simply absorbing the new tax, or passing it along to their customers as higher premiums. When an insurer decides to pass the tax increase along, it must send out a notification to its customers to let them know. Virtually all insurers have decided to pass along the tax increase, and the announcement letters have just begun to arrive in mailboxes across Oregon.

This has surprised and shocked many Oregonians, if letters of indignation to Legislators and the State's Insurance Commissioner are any indication. Many people apparently really believed that insurance companies would just go ahead and pay this new tax - even though doing so would require them to reduce their workforce or the pay and benefits of their employees.

One wonders sometimes at the sheer ignorance of so many people in our state. This is likely primarily a result of the fact that so many of them are survivors of the public school system, which provides virtually no education in economics or the free market, and generally promotes an anti-capitalism viewpoint.

Note to Oregonians - businesses don't pay taxes, individuals do. Any tax levied on a business - regardless of its form or origin - is passed along to employees or customers. In response to a higher tax bill, the options a business has are limited. It can:

• Increase the prices of its products or services
• Negotiate a reduction in the prices it pays for supplies, rent, etc
• Reduce the salaries or benefits of its employees
• Reduce the hours worked by its employees
• Postpone job-creating investments in people or facilities

Each one of these options is paid for by real people who are unlikely to realize any tangible gain from however government decides to spend the new money. There is no magic box of money sitting behind the CEO's desk just waiting for government to ask for some of it. Higher business taxes come out of the hides of real Oregonians - your friends and neighbors...and you.

Remember this when you are asked to vote to repeal the Legislature's job killing tax increases on businesses - large and small - this coming January.