Ad Wars Start

The proposed tax increases that Oregonians will vote on next month are both complicated and--in a sense--quite simple. An ad by supporters says that the state's minimum income tax--$10--has not gone up in 75 years. It seems very hard to believe, but it is true. And two thirds of all Oregon businesses pay the minimum, with the exception of the many sole proprietorships that are not subject to a minimum tax at all and won't be whether Measure 67 passes or not.

Opponents of raising the corporate minimum say that all those businesses that pay just ten dollars a year are not profitable, so how can we in good conscience raise their taxes? Well it should seem obvious to everyone that if a business makes no profit over a period of time, it can't stay in business. The opponents are referring to paper profits. Some small companies pay out all their profits in salaries. Some big companies are wildly profitable but pay the minimum because all of their sales are made out of state yet they still benefit from state services. Others take advantage of state tax credits or pass through a loss from a previous year. There's cash flow, plenty of money made sometimes--and that's great--but no paper profits. Thus they pay $10.

Under Measure 67, 137-thousand of the state's 150-thousand businesses would see their taxes increase to $150. At the upper end, about a hundred very big businesses would pay a new top minimum tax of 100-thousand dollars, and three quarters of those are based out of state.What impact would that have? One way of looking at is that Oregon now ranks third lowest in tax burden on businesses, mostly because we have no sales tax. Increasing the minimum plus modestly increasing taxes on the one third of companies that do show paper profits would bring us to fifth lowest. Not doing it would maintain part of the unfairness of Oregon's tax system and would have a serious impact on our schools, human services and public safety.