Last week, a fight over a ballot measure to fund services for people experiencing homelessness in the Portland metropolitan area spilled out into public view. Media outlets reported on accusations that opponents of Measure 26-210 are flat out lying about the measure that proposes funding homeless services through a tax on high-income earners and business profits.

While the language of the measure is clear that the tax applies to high-income earners and business profits, TV ads from the opposition paint the measure as a tax on groceries and medicine. The ads don’t offer any reason for the claim, but the opposition’s website states, “All Oregonians are likely to end up seeing an increase in the cost of living as businesses are left with no choice but to pass the cost of this tax on to consumers.”

This raises a key question about tax policy: Who ultimately bears the cost of taxing business profits?

The mainstream consensus is that taxes on business profits by-and-large fall on business owners — shareholders, in the case of corporations. One of the leading researchers in this field, Reed College’s Kimberly Clausing, concludes that “the corporate tax is likely to fall predominantly on capital or on economic profits,” making it a progressive form of taxation. Similar results come from researchers at the non-partisan Congressional Budget Office and Joint Committee on Taxation, and many others. The claim that taxes on business profits ultimately fall on consumers is simply not supported by the research.

Only by recognizing that taxes on profits fall on business owners can one make sense of what takes place in the real world. Corporations fight hard to obtain corporate tax cuts. They hire legions of lobbyists and campaign strategists in pursuit of that goal. Why would corporations spend money to lower taxes on business profits, if these businesses simply pass on the tax to consumers? Business owners certainly act as if they are the ones who bear the tax on business profits. Their actions speak loud and clear.

The conclusion that taxes on profits largely fall on business owners leads to a fundamental insight: Taxes on profits are one of the most progressive forms of taxation. Progressive taxes are based on ability to pay, meaning the rich person pays proportionately more than the poor person. Business income and the ownership of assets (including corporate stock) are highly concentrated among the rich. Those forms of income make up about three-quarters of the income accruing to the ultra-rich — the richest one-tenth of 1 percent.

Taxes on business profits are paid by business owners and shareholders, not consumers. As we seek to rebuild the economy and address vexing problems the state faces, like homelessness, we must also focus on increasing tax fairness in our state.