Oregon lawmakers urged to prioritize Oregonians by rejecting business tax cuts

News Release
March 23, 2020

More than three dozen organizations today urged Oregon lawmakers to reject calls for business tax cuts issued in the wake of the coronavirus crisis. Signatories of the open letter included community-based organizations, small businesses, labor unions, members of the faith community, and housing providers.

“The state’s priorities must be to contain the spread of the coronavirus, shore up our health systems, and protect our most vulnerable neighbors,” the letter said. “It is imperative that Oregon lawmakers resist calls for broad tax cuts or new tax subsidies — policies that would undermine Oregon’s ability to respond to the crisis and accelerate an equitable recovery.”

Last week, several Oregon business lobbies issued a call for tax cuts, including a suspension of the Corporate Activities Tax and new tax credits.

“There is already a severe risk that the coronavirus emergency will trigger a recession, resulting in a budgetary crisis as Oregon’s tax collections decline,” said Daniel Hauser, a policy analyst with the Oregon Center for Public Policy, one of the signatories of the letter. “Cutting business taxes would exacerbate that fiscal crisis, making it even harder for the state to respond to the public health emergency and protect vulnerable Oregonians.”

Like nearly all states, Oregon must keep a balanced budget, Hauser said. The state cannot spend more revenue than it collects or has available in reserves.

“Because the state cannot deficit-spend, like the federal government can, losing revenue through business tax cuts means fewer resources to provide equipment to hospitals, to keep families housed, and to take other urgent steps to protect Oregonians,” said Hauser.

The letter said that business tax cuts would “do little to help struggling businesses,” which won’t have much in the way of receipts or profits that would be subject to tax. Instead, it argued, “broad tax cuts and new tax breaks risk subsidizing profits for businesses able to ride out or even thrive during the crisis.”

Acknowledging the dire situation many small businesses face, the signatories urged the federal government to “support Oregon’s Main Street businesses so they can continue providing wages and benefits to the working families they employ.”

“We urge you to use Oregon’s available resources wisely and resist the call for tax cuts,” the letter said. “Instead, take bold action to keep our communities safe and our state financially secure.”