SearchHomeMenuSign UpDonate

Senators Urged to Reject Business Tax Bill

News Release
August 21, 2003 Download PDF

"A fiscal nightmare masquerading as an economic development scheme”

The Oregon Center for Public Policy called on the Oregon Senate to "support Oregon businesses and reject House Bill 3183" when it comes up for a vote in the Senate on Friday. The measure will raise corporate income taxes on over 2,600 Oregon businesses while lowering income taxes for only 1,400 businesses. The bill changes the way profits of corporations are taxed, lowering the taxes on those that have primarily out of state sales, and increasing the taxes on those that primarily sell in Oregon.

Charles Sheketoff, executive director of the Oregon Center for Public Policy, noted that, while raising taxes on many Oregon businesses, "the bill cuts taxes so substantially for the 1,400 'winners' that Oregon eventually will lose $147 million when fully implemented in the 2007-09 biennium. That's a 26 percent reduction in corporate income taxes." According to the May revenue forecast, the state economist has projected that corporate tax revenues will be $560 million in 2007-09 without this tax cut.

Download a copy of this news release:

Senators Urged to Reject Business Tax Bill (PDF), August 21, 2003.

No new jobs are tied to the tax cut. "The 1,400 businesses will get the tax break even if they don't hire more workers or if they lay off workers," Sheketoff noted.

“The bill is a fiscal nightmare masquerading as an economic development scheme," said Sheketoff. "It rewards companies with a large tax cut in the name of 'economic development,' yet without any guarantee that it will create a single job."

Sheketoff noted that some of the proponents of the measure have been laying off workers, such as Monaco Coach Corporation of Coburg, Oregon. "The bill amounts to payoffs for layoffs," he said.

The measure also doubles a research and development tax credit, makes the credit available to more businesses, and removes a "sunset" provision that would have required legislative review to keep the credit on the books past 2008. The bill makes the credit "a permanent taxpayer giveaway, with taxpayers paying businesses to do research and development they need to do anyway to stay in business," said Sheketoff.

It makes no sense for taxpayers to subsidize businesses by paying them to do something they are already planning to do," said Sheketoff. Like the change in the way corporate profits are taxed, businesses will get the tax break even if they don't hire more workers or if they lay off workers.

The measure also includes a provision allowing the Lane and Tri-Met transit districts to vote to raise the payroll taxes they levy. "Those districts may need the extra revenue to expand successful mass transit efforts," noted Sheketoff.

"No matter how you view it, the measure is bad public policy," said Sheketoff. "The needed transit revenue dresses up the pig, but it's still a pig."

The Oregon Center for Public Policy is a Silverton, Oregon-based non-profit research institute that uses research and analysis to advance policies and practices that improve the economic and social prospects of low- and moderate-income Oregonians, the majority of Oregonians.

NOTE TO EDITORS AND REPORTERS: A pdf file of this newsrelease is available at the OCPP website, http://www.ocpp.org/.

###