To achieve prosperity for all Oregonians, corporations need to contribute more to the common good. While many Oregonians struggle to afford child care or rent, many businesses have been posting record profits, even during a pandemic. Amazon, for example, has reported billions more in profits in this year than last.
This fact sheet is part of OCPP’s 2021 legislative agenda, Toward Prosperity for All Oregonians.
Meanwhile, Oregon’s tax on corporate profits is near a low point as a share of income taxes. Income taxes paid by corporations as a share of all Oregon income taxes has shrunk from nearly 19 percent in the 1973-75 biennium to about 7 percent in the 2019-21 biennium. This disconnect is in large part the result of aggressive corporate tax avoidance — the lobbying for corporate tax subsidies and the shifting of profits to offshore tax havens.
Who pays?
All of the proposals below apply only to C-corporations, those corporations subject to the corporate income tax. The largest C-corporations include household names such as Amazon, Verizon, and Bank of America, among many others. Taxes on corporate profits by-and-large fall on the owners of the corporation, the shareholders. Because corporate shares are disproportionately held by high-income, mostly white people, the proposals below target those most able to pay.
The following are specific ways Oregon can tax large, profitable corporations.
Reform corporate income tax rates and brackets
The reform: Oregon applies a set of tax rates to the profits reported by C-corporations on their Oregon corporate income taxes. This proposal would increase those rates for highly profitable corporations and reduce them for only modestly profitable businesses. Corporations with profits within these ranges would pay the listed tax rate:
- $0 – $1 million: 6% (a reduction of 0.6 percentage points for small businesses)
- $1 million – $10 million: 9% (an increase of 1.4 percentage points)
- $10 million +: 11% (an increase of 3.4 percentage points)
Revenue raised: $317 million in a full biennium
Enact complete reporting for large corporations
The reform: There is a long history of large, multinational corporations shifting profits to low-tax countries to minimize their taxes owed in the United States. Complete reporting would require multinational corporations to include in tax calculations their worldwide business activity instead of just the activity occurring within the United States — a move that would prevent many tax avoidance techniques.
Revenue raised: Awaiting estimate from the Oregon Legislative Revenue Office.
Extend the corporate minimum to more out-of-state businesses
The reform: This policy change would extend the corporate minimum tax to businesses that sell goods in Oregon, but do not have a physical presence, and therefore are not currently required to pay Oregon corporate taxes.
Revenue raised: Awaiting estimate from the Oregon Legislative Revenue Office.
