Corporate Tax Dodge: The Decline of the Oregon Corporate Income Tax and the Shift to Individual Taxpayers


Executive Summary

Oregon’s state corporate income tax has dropped to very low levels, both as a share of the economy and as a share of all income taxes paid in Oregon.

The long-term decline in corporate income taxes is primarily because corporations have won a number of tax breaks, and because corporations have grown aggressive about employing abusive tax shelters that lawmakers never enacted or intended to allow.

Multistate corporations enjoy the lion’s share of potentially taxable profits collected in Oregon and hence are the primary beneficiaries of the declining corporate income tax. As the tax burden has shifted from corporations to individual taxpayers, low-income taxpayers have been the hardest hit with increases.

Neither the growth in “pass-through” businesses nor the growth in fees is responsible for the decline in corporate taxes.