Tax policy took center stage in the 2017 legislative session. From a corporate tax reform proposal that fizzled, to a successful effort to protect health care coverage with health provider taxes, to a far-reaching transportation package mainly paid for by an increase in the gas tax. And that’s not all. While less notable, the legislature enacted further changes to our tax system.
As the legislative session winds down, the Oregon Senate has an opportunity to correct a serious tax injustice from a few years back, while also helping preserve services that protect the most vulnerable Oregonians. With a simple majority vote, the Senate can and should cut the tax break for “suits and scrubs.”
It’s never too late to hope that lawmakers do the right thing. Here at the Oregon Center for Public Policy, we hope lawmakers enact a commercial activities tax that raises game-changing revenue, so Oregon can finally upgrade our schools and essential services. If they take that bold move, the Center hopes they will include an aptly named “CAT Fairness Credit.”
Twenty-five cents for every $100 in sales.
That is how much a company in the construction industry with $100 million in Oregon sales would pay under the commercial activities tax (CAT) being discussed in the legislature. Those 25 cents would be paid by the company, reducing the profit passed along to the owners and taxed on their personal income taxes.
I’ve heard some folks opposed to enacting a Commercial Activities Tax (CAT) complain that taxing gross receipts, rather than profits, is unfair.
And yet the personal income tax Oregonians pay functions, in large part, like a gross receipts tax.
This week, the Kansas legislature finally had enough. On a bipartisan vote, it pulled the plug on a massive tax cut experiment that wreaked havoc on the state’s schools, essential services, and finances.
With lawmakers considering an overhaul of how Oregon taxes businesses, it’s a good time to reiterate a point we’ve made many times: When it comes to business climate and Oregon’s economy, the quality of public structures and quality of life matter, not how a state ranks in terms of spending and taxes.
[This blog was corrected 6/13/17.] *
You don’t need to look far to see that Oregon is not investing enough to meet the needs and aspirations of Oregonians.
With the clock ticking on an Oregon legislative session that has yet to resolve a $1.4 billion revenue shortfall, the business lobby got an opportunity last Thursday to offer its solution to the problem. The testimony of a Brighter Oregon, a business coalition, took up the entire meeting of the legislature’s Joint Committee on Tax Reform.
School districts in Oregon have been drawing up plans for staff cuts, in case the Oregon legislature fails to come up with the revenue needed to fill a $1.4 billion state revenue hole. And according to several teachers who spoke during a town hall in Portland this past Saturday, pink slips have already started landing in some schools.
© Oregon Center for Public Policy 2023
