Oregon business’ tax dodge con
exposes the truth about a corporate-backed effort to try to overturn moderate tax increases passed this year on Oregon's corporations and wealthy.
A GROUP calling itself Oregonians Against Job-Killing Taxes has launched a slick, fear-mongering ad campaign against new progressive tax measures approved by the Oregon legislature, but now on the ballot in January for voters to approve.
Taking a page from the anti-gay "Yes on Proposition 8" playbook, this "business-led coalition of Oregonians" is saturating their campaign literature with a particularly disappointing quote from President Barack Obama. The quote is taken from an NBC interview last August when Obama, commenting on the national economy, stated "the last thing you want to do is raise taxes in the middle of a recession." Now some of the wealthiest Oregonians are using Obama's line to get out of paying their fair share.
The list of organizations registered as members of Oregonians Against Job-Killing Taxes reads like a catalog of opulence and greed. The coalition unites the Chambers of Commerce and big business associations across the state. They banded together with anti-tax tea baggers and managed to get enough signatures to put Measures 66 and 67 on a special election ballot at the end of January.
While they claim to be waging a "job-saving" campaign, it's hard to believe this alliance of capitalists has the interests of anyone but their own in mind. Take the Portland Business Alliance, for example, which last year hired a rent-a-cop firm to raid downtown homeless encampments, displacing over a hundred destitute people in downtown Portland.
That Boise Cascade LLC and Weyerhaeuser--two companies responsible for some of the biggest job-killing layoffs in the Northwest--are listed as business members of Oregonians Against Job-Killing Taxes, should make most people question the motive of this corporate campaign.
SO WHAT provoked this anti-tax crusade? In order to make a dent in Oregon's $4 billion budget shortfall, the Oregon legislature passed Measures 66 and 67 to raise $733 million in new revenue from corporations and high-income Oregonians.
Measure 66 slightly raises taxes on the top 3 percent of earners in Oregon and exempts 270,000 unemployed Oregonians from taxes on their first $2,400 in unemployment benefits. Measure 67 raises the corporate minimum tax in Oregon, which has been on the books since 1931, from $10 to $150 (oh my!). It also raises taxes on corporations that rake in more than $250,000 in yearly income.
As Oregonian columnist Steve Duin put it:
The [Oregonians Against Job Killing Taxes] Web site insists that "the most damaging" tax increase for business would require that a C-corporation with $25 million-$50 million in Oregon sales will now pay a gross sales tax of $30,000. That's all? Less than one-tenth of 1 percent? For many companies that, for years, have paid the $10 minimum? Who in the world considers that unreasonable?
For years, corporations in Oregon have been taxed a shockingly small amount, and they want to keep it that way.
Following the national trend, the state has slashed at corporate taxes. According to economist Michael Leachman, "In the fiscal 1973-75 budget cycle, corporations [in Oregon] paid 18.5 percent of all income taxes. In the...2005-07 budget cycle, corporations are expected to pay just 4.6 percent of Oregon's income taxes."
Furthermore, according to an Oregon Center for Public Policy (OCPP) study, in 2006, "63 percent of all corporations operating in the state paid only $10 in income tax," and a quarter of those corporations made over $1 million in taxable income in the state. As another OCPP reports point out, corporate profits in Oregon have grown nearly eightfold since the late 1970s, while corporate income tax revenue has only grown by half that much.
This means that "corporations operating in Oregon now pay 71 percent less in state corporate income taxes as a share of the economy than they did in the late 1970s," according to the OCPP. On top of all that, 40 of the 49 corporate income tax breaks written into the state tax code were enacted after 1980. In fact, even if Measure 67 passes, Oregon will only move from having the third-lowest to the fifth-lowest corporate taxes of any state in the nation.
Meanwhile, the wealthiest Oregonians have further profited through an increasingly regressive tax structure.
Oregon is one of the few states that assess income tax on the wages of families living below the poverty line. As the OCPP explains, "The lowest-income Oregonians currently pay 8.7 percent of their income in taxes, the highest share among all income groups...The wealthiest 1 percent--households with income in excess of $410,000 and averaging over $1 million--pay only 6.1 percent of their income toward state and local taxes."
Even if Measure 66 passes, Oregon's tax system will be far from equitable. While the percentage poor Oregonians pay in income tax will stay at 8.7 percent, the wealthiest 1 percent will only see its tax rate increase from 6.1 percent to 6.6 percent.
Yet this small increase in taxes on some of the wealthiest Oregonians will save $285.5 million for K-12 education. This is enough to pay for 1,610 teachers and 1,057 hourly employees, such as custodians, bus drivers and cafeteria workers. In a state that ranks 49th in class size, saving jobs in our public schools should be an absolute priority.
The tax increases will also prevent large tuition and fee hikes for college students by providing $24.4 million to Oregon's community colleges, $39.9 million to the Oregon University system, $4.1 million to Oregon Health and Science University and $5.1 million for financial aid. The tax hikes will also likely stop further cuts in Oregon's "public option" health care plan.
VOTING "YES" on 66 and 67 should be a no-brainer for most Oregonians, and those who want to see these measures passed should get involved with the Vote Yes for Oregon Campaign.
But Measure 66 and 67 will not stop the escalating attack on poor and working-class people. The two measures passed through the Democratic-controlled Oregon state legislature along with a series of brutal cuts to education, healthc are and other social services.
Furthermore, as economist Rick Wolff recently pointed out, state budget shortfalls will be worse in 2010, 2011 and 2012 than they were in 2009. A new report by the Pew Center on the States named Oregon as one of the top five U.S. states likely to follow California into the state budgetary swamp.
The budget cuts are already adding to the suffering that thousands of Oregon's poor and working-class people experience every day. While Oregon's official unemployment rate hovers around 12 percent, Black unemployment is at nearly 19 percent, and a broader unemployment rate that includes underemployed workers stands at a shocking 23.3 percent for all Oregonians.
A recent survey by the Northwest Area Foundation found:
Forty-one percent [of Oregonians] say they or a family member at home have had work hours cut during the recession. Nearly a third have housed a family member or friend because of money...More than a quarter of Oregonians say they or a household member have had problems paying for necessities such as mortgage, rent, heating or food during the past 12 months.
Over 35,000 Oregonians lost their homes this year. More than 506,000 people in the state, including 148,000 children, are now living below the poverty line. Oregon food stamp caseloads have grown by 45 percent.
All of this disproportionately effects Black and Hispanic populations. In 2005, the West Coast Poverty Center found that while Latinos and African Americans only made up around 11 percent of the Oregon population, more than one in four "Hispanics (27.2 percent) and Blacks (25.9 percent) in Oregon were living below the poverty line."
So yes, we need to tax the rich even more than Measure 66 and 67 do. We need to end the regressive tax structure that lets enormously profitable corporations pay pocket change while poor Oregonians cough up the largest share of their income. We need to end the wars in Iraq and Afghanistan that have cost Oregonians over $7.4 billion since 2001. We need to build mass movements that demand jobs, housing, an end to poverty, quality public education and free health care for all. And lastly, we need to fight for a political and economic system that won't let the rich live in luxury while millions struggle to get by.