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Oregon: Compromise on Taxes?

Posted By Administration, Wednesday, May 24, 2017

Oregon has become a tax battleground. The state has a huge deficit and is desperate for more income. Raising taxes is usually the first choice of some politicians. One such effort in Oregon was last November’s Measure 97. It was a corporate tax hike of 2.5% for businesses doing business in Oregon with income over $25 million.

Opponents called it nothing but a sales tax and it went down in flames and became one of the most lopsided ballot measure rejections in history.

Undeterred, Democrats in Oregon’s Legislature are looking at similar proposals to plug some of the $1.5 billion deficit. Oregon Senate Revenue Chairman Mark Hass — a Democrat — has put together a plan that builds on Measure 97 and on a plan introduced earlier in the Legislature by House Speaker Tina Kotek of Portland.

Basically, it replaces the state’s current corporate tax on profits with a tax on sales and gives low and middle-income people personal income tax cuts or credits to offset the higher prices that will no doubt come down because of the corporate sales tax.

The rates in the plan would be lower for manufacturers, wholesalers and retailers. Sales for law firms, real estate agents and doctors and other health care providers would be higher. However, the taxes will only apply to sales over $3 million.

Hass said his goal is “to find exactly the right rates that sync up with where our economy is and don't put a burden on working people. Whatever that ends up being that's what we'll do. My interest is the policy. We've got to make sure we get that right.”

Kotek wants to raise about $2.2 billion for the upcoming biennium. The Hass plan will raise about $640 million.

Republicans are opposed. Hood River Republican Rep. Mark Johnson and others say any news business tax must be accompanied with cuts in state spending and especially in public employee pension costs.

In reality, Johnson wonders why a new tax is needed at all. “Are we simply engaging in an exercise of trying to reform our tax structure because it's in need of reform because of the changes in our economy? Or is this an exercise in trying to acquire additional revenue?” he said.

Source link: OregonLive.com

Tags:  Insurance Content  Insurance Industry  Insurance News  Oregon: Compromise on Taxes?  Taxes  Weekly Industry News 

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