Oregon’s corporate income tax system is broken. It is so riddled with loopholes that big corporations today are paying a fraction of the income taxes, as a share of their profits, that they paid in Oregon a generation ago. Today, two of every three corporations doing business in Oregon pay only $10 annually in corporate income taxes.
As a result, Oregon individuals and families have to pay a larger portion of the costs of public investments and services. In this budget cycle, corporations are paying six percent of Oregon’s income taxes, leaving households to pay 94 percent. In the mid-1970s, by contrast, corporations in Oregon paid about 18 percent of the state income tax bill. At the same time, Oregon homeowners are paying a larger share of local property taxes than a generation ago, while businesses are paying less. Oregon families get stuck picking up the tab when corporations escape taxes on their profits and property.
The time has come for Oregon to honor the good corporations who pay their fair share, and to shine the light of public scrutiny on the irresponsible corporations who don’t, and hold them accountable. That is what Corporate Accountability Reporting will do.
Initiative petition #102 would establish Corporate Accountability Reporting in Oregon. The measure requires some large corporations to file a report with the Oregon Secretary of State specifying tax-related information that will be available for public review.
The law covers only large corporations, not small businesses. Small businesses – corporations with fewer than 250 employees and less than $10 million in sales in a year (that’s less than $192,308 a week), and corporations where employee-owners are performing personal services in fields such as health, law, engineering, architecture, accounting, and consulting – are exempt.
The measure will help restore public confidence in Oregon’s corporate tax system. Corporate Accountability Reporting will improve decision-making about tax loopholes and tax incentives – helping Oregonians understand which tax breaks work, and which do not. The information will help create the climate for corporate tax reform.
Public acknowledgement of responsible corporations who pay their fair share in taxes is good for Oregon’s business climate. It will show that corporations selling to Oregonians and operating in Oregon can make a profit. Oregon bases corporate taxes on those profits, not revenues.
The information made public will help Oregonians construct a corporate tax system that treats corporations equitably, which is good for the business climate. Corporations want to locate and sell their products and services in states with fair tax systems.
The time is right for Corporate Accountability Reporting. With large corporations getting a 36% tax cut this year in corporate kicker tax credits, and more slated for 2007, it is time we learn who’s paying their fair share in taxes, and who isn’t. The Corporate Accountability Reporting initiative will be good for Oregon, good for Oregon’s economy, and good for Oregonians.
