One of the most contentious issues on Oregon ballots this fall is a measure that would increase corporations' minimum tax when Oregon sales exceed $25 million, resulting in as much as $3 billion in state revenue per year.
Critics say Measure 97 is akin to a sales tax. They argue the tax burden will be passed along to consumers, costing Oregonians jobs and money. Economists, however, say opponents' logic is flawed. Measure 97 will affect just a fraction of 1 percent of all businesses in Oregon, a state with the lowest corporate tax burden in the nation. And corporations will not pass the cost on to consumers, the economists argue — or else why would they be spending millions to defeat this measure?
Martin Hart-Landsberg, a professor emeritus of economics at Lewis & Clark College, says Oregon is justified in raising taxes on corporations that "have largely stopped paying state income taxes." The revenue is crucial for improving education, senior services and health care — three areas where the state is shortchanging Oregonians.
Mary C. King, a professor emerita of economics at Portland State University, notes that Measure 97 does not increase taxes on small businesses. Instead, she says, it taxes only the biggest corporations, which have exploited loopholes to reduce their taxable income. But they won't be able to dodge this one, she adds, because Measure 97 taxes sales, which companies must report. Corporations will finally pay their fair share – as Oregon's small businesses already do.
Robin Hahnel, a professor emeritus of economics from American University and faculty affiliate at Portland State University, says Measure 97 opponents have been feeding Oregonians lies. For example, they argue that the tax measure will cost an average Oregonian $600 per year, citing a report from the Legislative Revenue Office. That report estimates per-capita state taxes will rise by $600 — but that doesn't mean we'll all pay more taxes. "Imagine Oregon decided to collect $3 billion more a year in taxes from one Oregonian – say Phil Knight," Hahnel says. "This would also increase state taxes per capita by $600, but clearly it would not cost anybody in Oregon except Phil Knight a penny."
STREET ROOTS' ENDORSEMENTS: Yes on Measure 97
