As of Tuesday, May 9, 2017
Oregon lawmakers have rolled out a broad plan to overhaul the state's corporate tax system with a plan that would replace Oregon's corporate income tax with a tax on businesses' gross receipts, or revenues from business-to-business transactions for things like equipment and materials.
The proposal is similar to the Measure 97 tax hike initiative, which would have raised $6 billion for the next two years and was soundly defeated by voters.
The proposal is short on details, but could net anywhere between $288 million and $3 billion in additional funds for the cash-strapped state over the next two years, according to a report from the Associated Press.
The proposal, with bi-partisan support, could be adopted by the Legislature. Or, if bi-partisan support is lacking, it could be placed on the ballot for voter approval, thereby circumventing the minority party.
Both sides, Democrats and Republicans, seem to agree that Oregon's tax structure needs major revisions.
Given that voters have placed them in office for just this sort of work, Oregon will be best served by a proposal supported – and passed — by our representatives, not one shuttled off to the voters in hopes they will support the majority party.
Finding a balance won't be an easy task.
Democrats and labor unions have been squaring off with Republicans and businesses over whether Oregon's budget woes stem from corporations not paying their fair share or runaway government spending that's reaching unsustainable levels.
Both, in my view, are true.
There is plenty of runaway spending to point to, and during their fight against Measure 97, many in the business community agreed the state's tax burden is lighter on business than it should be.
Their objection to Measure 97 was in the details of the measure, which targetted businesses unfairly.
Oregon's tax structure needs to be changed. Its heavy reliance on personal income taxes creates volatility during tough economic times, while voter-approved property tax caps from the 1990s have reduced funds to education and other services by roughly $2.8 billion annually by today's standards, according to the AP report.
Oregon's lack of a sales tax may also further hamper potential new sources of revenue.
Is a gross receipts tax the solution? I don't know.
So far, Republicans in both chambers appear ready to double-down on their opposition.
"No gross receipts tax, period. Oregonians slammed the doors shut on Measure 97 and they want to have a conversation not on a hidden sales tax, but on reining in out-of-control government spending," Senate Republican Leader Ted Ferrioli has said in a statement.
The minority party's support for the proposal is needed because without it, the Legislature won't have the three-fifths, or 60 percent, approval that any tax increase needs from lawmakers before signing into law by the governor.
Hopefully, the Republicans will float their own solution to changing Oregon's tax structure, or negotiate significant changes to the proposed bill so it has their support.
The result — a bipartisan solution supported by three-fifths of the Legislature – would be a big win for Oregonians.
If the Legislature chooses, instead, to send the bill to the voters they will have failed to provide our state with the leadership it needs. I, for one, will vote against it – and for better representation as well, because those in office will have failed to do their duty for the people of Oregon.
— Mark Gibson
This state does not have a budget shortfall; there is more revenue pouring into the state coffers than ever before. This state has a spending problem and the Legislature should not be levying new taxes on businesses or citizens until it has taken steps to get its own house in order.
It will not matter how much money the state brings in with new taxes if state officials don’t learn to differentiate between a “want” and a “need.”
Since 2011, Oregon revenue has grown almost 40 percent, a pace unmatched by almost any other state. Never in the state’s history has so much money been amassed for government services. Economists expect there to be $3.1 billion more revenue in the current biennium than the previous two years.
The problem is that government growth has outpaced revenue by the $1.8 billion that you hear officials referring to as a “deficit.” Despite the good revenue numbers, Oregon’s debt load is $37.5 billion, about $9,300 for every man, woman and child in the state. In addition, the unfunded PERS liability stands at $22 billion.
It is interesting to me to hear elected officials at all levels of government bemoaning the fact that tax limitation Measures 5 and 50 prevent them from sticking their hands in our pockets for more money. I wonder how much thegovernment would take if its taxing power was unrestricted?
On the table in Salem right now is a watered-down version of Measure 97, a hidden sales tax that was soundly defeated by voters in November.
M97 would have imposed a 2.5 percent tax on the gross receipts of corporations, including agricultural co-ops, doing more than $25 million in sales in Oregon.
Exorbitant costs would have been passed on to the consumer.
Gov. Kate Brown and other Democrats in Salem are drooling at the thought of resurrecting the backdoor sales tax to get their hands on millions even though they are disrespecting the will of the people and threatening the businesses in the private sector that pay the bills.
Oregon lawmakers now want to replace the state’s corporate income tax with a tax on businesses’ gross receipts, beginning in 2018. Economists estimate the new tax plan could net anywhere between $288 million and $3 billion over the next two years.
The new gross receipts tax proposal would be more broadly applied than M97 would have been, hurting the operations of even more businesses.
Oregon doesn’t appear wise enough to learn from several other states, Michigan, New Jersey, Indiana and Kentucky, that repealed gross receipts taxes because of the negative economic consequences.
Think any company is going to pay more in taxes and then not turn around and raise prices on consumers?
Our founding fathers had experienced the tyranny of big government and they wanted something very different for the citizens of the republic they established.
They wanted a country where there were severe restrictions on all large collections of power (government, banks and corporations all included). Because we did not respect the wisdom of our founders, government just keeps getting bigger and the percentage of self-employed Americans is at an all-time low.
Today, approximately 70 percent of all federal government activity involves taking money from some Americans and giving it to other Americans.
We are becoming the country our founders warned against because we have turned our back on principles that were the bedrock of personal liberties. Americans need to wake up and take back their government.
— RaeLynn Ricarte