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.

Creating a personal income tax credit to address the impact of a proposed commercial activities tax (CAT), instead of reducing personal income tax rates, would strengthen a tax reform plan currently under discussion in the Oregon legislature. This new tax credit (the “CAT Fairness Credit”) would target relief to low- and middle-income groups — taxpayers with income below $64,000 — while raising more revenue to invest in schools and essential services.