Portland Business Climate Has Spirits

Chuck Sheketoff

MstarWhile the Portland Business Alliance, the Oregonian's David Reinhard, and some politicians like to focus on companies who leave Portland allegedly because of the business climate and taxes, here's the other side of the story --- House Spirits distillery of Corvallis, who make Medoyeff Vodka, are moving their operation to Portland's eastside industrial district as they increase production and expand their products to include gin and wiskey.

Willamette Valley readers of the Albany Democrat-Herald and the Corvallis Gazette-Times learned of the move in their papers. Like their big lie that the rich are fleeing Oregon to live in Vancouver, the business community, their media flacks, and opportunistic and campaign money hungry politicians often only look at one side of the equation. Businesses are moving to Portland. Here's another example that taxes don't matter.

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    But wait, doesn't business hate Portland liberals. Or is it the liberals who hate business?

    Wait a second--liberals love vodka, that's what it is.

  • Steve (unverified)
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    Like their big lie that the rich are fleeing Oregon to live in Vancouver

    OK, so how many companies have moved from Vancouver to here?

  • Michael (unverified)
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    Chuck I hate to disturb your sleep, but maybe not all businesses are affected equally by the same factors. For some being in a transportation hub may have a greater impact on their bottom line than the cost of electricty. On the other hand being near a transportation hub may not be important for some. Two examples. A liquor distiller needs access to trucks and roads an accounting service may not need to be next to a transportation hub. M.

  • Tax Increase (unverified)
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    Taxes don't matter you say? What about the fact that Oregon has one of the lowest alcohol tax rates in the nation? Perhaps it is too obvious, but wouldn't that be appealing to a distiller of vodka?

    Cheers.

  • Roman (unverified)
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    If taxes don't matter, explain Kruse way.

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    Dude, that Chevy's on Kruse Way has killer fajitas. And have you tried the spinach dip at Stanford's?

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    Oh, and Kruse Way is also at the intersection of two freeways: I-5 to Portland and 217 to Beaverton/Hillsboro. It's also just five minutes from I-205 to East County. Oh, and it's in L.O. where lots of business leaders live...

    Is it that incomprehensible to imagine that businesses might want to locate at the confluence of three major highways that provide easy access to every portion of the metro area.

    Plus the fajitas.

  • Chris Snethen (unverified)
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    Mmmmm....fajitas. I think I've got a two-fer coupon floating around here somewhere.

    The real culinary jewel of Kruse Way though is actually around the corner on Boones Ferry. Szechuan Kitchen. Right across the street from the KFC. Try the duck. Makes me misty just thinking about it.

    Geographically what defines the eastside industrial district?

  • Andrew Tunall (unverified)
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    Chuck, I think you've hit it on the spot. Several in the Portland business community like to rag on Portland for having high taxes to support schools and essential public services. Yet I find a lot of examples of businesses moving to places where education, healthcare, and public services are a priority.

    Take the new Toyota plant that is now being built in Canada as an example. Officials at Toyota cited the United States' lack of a healthcare system for retirees or current employees as its reason for moving north of the border. That, and Canadian employees are better educated and trained.

    Makes you think that maybe all of our tax dollars going into education aren't such a bad thing, as those who claim an apparent exodus of business from Portland would like us to believe.

    Andrew

  • Sid Leader (unverified)
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    A new distillery in Portland?

    I'll drink to that!

    So will W, from what I hear.

  • Roman (unverified)
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    Maybe it is the fajitas on Kruse Way, but you're way wrong if you don't think many of those businesses located just outside of Multnomah County aren't there because they're saving money. They aren't filled with Lake Oswegans. If so, the restaurants would be serving up more than fajitas. But you can think anything you want. "Taxes don't matter?" Absurd.

  • Steve (unverified)
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    Mr Chisholm: Is it that incomprehensible to imagine that businesses might want to locate at the confluence of three major highways that provide easy access to every portion of the metro area.

    I think all of downtown PDX has access to 405, 5, Banfield and Sunset freeways. Knowing people who looked at Portland to locate business, a lot of the business taxes discouraged them. "Greedy" Lake Oswego actually built Kruse Way to accomodate automobiles better than Portland and has lower taxes.

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    Andrew,

    Exactly. Which is why Mill Plain Blvd. in Vancouver is booming. It has everything you identified: good public schools, public services, and health care.

    And which is why nearby Gateway area in Portland is doing nothing. Same transportion nexus (if anything, more convenient-closer to the airport, railways, and highways).

    So what's the 'Couv doing that Portland is not?

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    Tax Increase: the move from Corvallis to Portland can't possibly be impacted by the statewide alcohol tax.

    Steve: In Oregon 2/3 of businesses pay only $10 - our corporate minimum tax. No one in Oregon pays any tax (and some of the 2/3 escape it) if they don't have a profit. In Vancouver, Washington has a B&O tax that is levied regardless of whether there's a profit. As documented here there is a healthy inflow of individual taxpayers (including owners of S-Corps) from Washington and other states.

    Roman: Kruse Way exists. So what? Businesses in Kruse Way don't need to be downtown for access to the state and federal courts regularly, or other reasons that businesses locate downtown, like good public transportation. The fact that Kruse Way exists doesn't in an of itself denegrate downtown. And who has more cranes on the skyline these days, Kruse Way or Downtown Portland? Where are condos being developed and sold before the cement is even poured or the apartment conversion is even complete?

  • LT (unverified)
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    Seems to me it is time for an honest debate about "business climate". Some of the rhetoric seems a century old, like the attitude that government should kowtow to large corporations lest they be seen as hostile to business. Teddy Roosevelt made clear 100 years or so ago that he didn't agree with that. He even said at one point "A great democracy must be progressive or it will cease to be great or a democracy". Progressive means open to everyone.

    Seems PacificCorp has a problem with SB 408. They could go after those who supported that bill in next year's elections, as is their right in a democratic society. Or they could just whine about what elected officials did, as in these excerpts from the Oregonian website:

    "PacifiCorp, which shares MidAmerican's aversion to a draft rule that would implement the tax law, has become increasingly frustrated over the way the state is treating key industries, such as utilities.

    The new law "could have a very chilling effect on the business climate, which already is frosty," said Judi Johansen, PacifiCorp president and chief executive.

    Johansen stopped short of suggesting that changes in the way utilities' income taxes are applied to their rates -- the results of Senate Bill 408 -- could drive MidAmerican investors away from the deal or force PacifiCorp headquarters to another state, such as Utah, where most of the utility's customers live.

    But, Johansen said, "Clearly, MidAmerican is watching SB408 and is concerned about the implications and the general tone this sends about the business climate. It's a big issue." ~~~~~~~~~~~ MidAmerican and PacifiCorps officials have expressed concerns about a bill passed by the 2005 Legislature and signed by Kulongoski that makes changes in the way utilites are taxed.

    Under the new law, money that utilities collect from their customers to pay taxes will have to be given back if the taxes wind up not being owed."

    At least 3 other topics here (there are more) have discussed this. I don't see how giving businesses large enough to have lobbyists everything they ask for (what about small business?) is the key to growing the economy.

    Here were the other topics I noticed under POSTS:

    May 2, 2005 Chuck Sheketoff Yahoo! Another $10 Taxpayer!

    July 6, 2005 guest column Tax Absurdities from PGE & Pacificorp

    July 18, 2005 guest column Corporate America's Jobs Scam

    The examples above strike me as anecdotal. If the climate were really that lousy, all businesses who could would be leaving and no one would be taking their place.

  • chris mcmullen (unverified)
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    LT, you do realize corporations and businesses don't pay taxes in the first place, don't you? Taxes (along with other expenditures) are passed along to consumers and shareholders.

  • LT (unverified)
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    LT, you do realize corporations and businesses don't pay taxes in the first place, don't you? Taxes (along with other expenditures) are passed along to consumers and shareholders.

    Funny, that isn't what Kim Thatcher said when she was running for state rep. last year. She said "Only businesses pay taxes" and was startled at that debate to have state employee come up to her afterwards and ask why public employees fill out tax returns if only businesses pay taxes.

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    Chris McMullen is just echoing the bumpersticker claim that businesses don't pay taxes - If that were as true as Cascade Policy Institute's Bill Conerly really thinks, then why do the protest corporate taxes and find ways to evade and avoid corporate taxes and regulatory obligations that add to the cost of doing business? It is a statement that sounds nice but is meaningless.

  • chris mcmullen (unverified)
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    Then why do the protest corporate taxes and find ways to evade and avoid corporate taxes and regulatory obligations that add to the cost of doing business?

    I assume by 'the' (sic) you meant 'they' and by 'they' you mean corporations.

    Sometimes corporations (but mostly small to medium sized businesses) try to reduce overhead in order to maximize profits and stay competitive. Unlike government, businesses have to stay lean and efficient in order to avoid bankruptcy (ergo; keep people employed).

    Moreover, tax breaks and giveaways are not a partisan issue. Hell, Portland's been giving away the store to big developers in order to promote New Urbanism. Since when has Portland been governed by a conservative Republican or Libertarian?

    As an aside, if you want to talk about business friendly countries, let's start here.

    The last paragraph particularly;

    "The World Bank report contended that countries with more rigid labor laws also tended to have higher unemployment. On average, the bank said, unemployment was lowest in countries with the easiest rules for doing business and highest in countries with the most difficult rules. Countries with rigid workplace rules also tended to have greater rates of youth unemployment and a smaller share of women in the work force."

  • wise up (unverified)
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    Chuck I don't believe any development around Kruse Way required any public subsidies.

    Just as South Waterfront could have been with a better outcome.

    The cranes you see downtown are there because the public is being forced to help pay for that development. The city is making long term nonsustainable commitments which will require new revenue to backfill basic services budgets they robbed for those towers.

    One of the cranes is for the new OHSU building which will never pay any property taxes.

    Kari is it that very comprehensible to imagine that businesses might want to locate at the confluence of highways that provide easy access to every portion of the metro area.

    That's why Metro's tax subsidies for their "Centers" and TOD programs is an illegitimate use of tax dollars.

    You and Chuck continue to sit on the sidelines while one wasteful venture after another comes out of our planners.

    Why don't you just spit it out and disclose that you are all for the spending of hundreds of millions on the Tram, TOD's, SoWa, Light rail, Convention Center/Hotel and every other boondoggle?

    While the only revenue generating policies you advocate are tax increases.

    And never realizing your approach will never keep up with or accommodate the "planned" development boondoggle waste.

  • Tom Civiletti (unverified)
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    It's time to learn how to argue like adults, boys and girls. I know many of you were reared on the rhetorical tit of Ronald Reagan, but, really, anecdotes are good only as supporting evidence. In this case the anecdote of the development of Kruse Way does not support the big picture. Clackamas County has relatively low taxes on business, and also has the highest ratio of housing to jobs and the highest percentage of residents commuting out of county for work.

    Chuck may have written hyperbolically that taxes don't matter, but the evidence suggests that they don't matter much.

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