Dear Oregon Media: A little specificity would go a long way
Kari Chisholm
Over at Willamette Week, they've got a fairly good run-down (and a positive YES endorsement) of Measures 66 and 67. But like the Oregonian has done repeatedly, they unfortunately helped make things more confusing by using non-specific language.
In trying to explain Measure 67, WW's Nigel Jaquiss writes:
All companies would pay the new minimum tax or the 7.9 percent tax on profits, whichever is higher.
No, no, no. Only C-Corporations will be subject to either the profits tax or the new minimum tax.
The vast majority of companies in Oregon are organized as S-Corporations, LLCs, or LLPs. And those companies would only pay $150 (up from $10) - no matter how big their sales, or how big their profits. (For those kinds of companies, profits are subject to personal income tax when they're distributed to their owners.)
What's with the plague of non-specificity among Oregon reporters on this issue? The Oregonian likes to say "corporations" without distinguishing between S- and C- corps, and now WW is giving us the non-specific "companies" to confuse things as well.
Tax policy is confusing enough when the NO side of the political fight is deliberately trying to confuse voters. The media should be trying to shed light on this for voters, and make it simpler and easier to understand - not aid and abet the confusion.
Remember: Only C-Corporations (those with lots and lots of shareholders) are subject to the new sliding-scale minimum tax on gross sales. The vast majority of Oregon companies - S-Corporations, LLCs, LLPs - will only pay $140 more.
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connect with blueoregon
Jan 6, '10
Kari, thank you for this clarification.
As an Oregon business owner, I have been disappointed in the manner in which local Chambers of Commerce, including Beaverton, claim to be "fighting job-killing taxes" they say would result from Measures 66 and 67.
With so many tax loopholes present for business, and so many major corporations in Oregon able to pay zero taxes at all, it is a difficult proposition for me to accept the measures would kill jobs -- unless the implication is that it would affect those businesses that are not operating sustainably. Too bad for them.
I'm happy for my business to pay its fair share to help support the economy, but it's obvious some businesses are not -- and to me, that is the attitude that stands to kill the most jobs.
Jan 6, '10
Not all 'C' corporations have "lots and lots of shareholders". I co-own a 'C' corporation. There are two shareholders. My business partner and myself.
12:39 p.m.
Jan 6, '10
Agreed: the "business" lobby certainly does not represent the interests of either of my businesses.
Yes, I will pay $140 more. Big deal. Small price to pay when considering the benefits.
Jan 6, '10
To clarify, C-corporations may have unlimited shareholders, whereas S-corporations are limited to 100 shareholders, along with other restrictions. To learn more, visit: http://www.irs.gov/businesses/small/article/0,,id=98263,00.html
Jan 6, '10
I can't speak specifically for any of the reporters covering this, or their publications. I can tell you, though, as journalists, we are constantly under pressure to make things shorter/more succinct/easier to understand/less wonky.
Your explanation (which still doesn't explain what the difference is between an S-Corporation, C-Corporation, LLC, LLP, etc) took up seven inches of news copy -- seven inches that, realistically, would have to be repeated in just about every story that sinks its teeth into M67. Meanwhile, today's Oregonian Metro section had a news hole of roughly 4 pages.
Again, I'm not defending inaccuracy (and I'm not saying anyone was being inaccurate)... just saying that it's not as easy as "you guys didn't tell the whole story." Of course they didn't. With four pages to cover an entire state and still be relevant to the news consumer, who can?
Jan 6, '10
And we all know that the "fair share" for corporations with "lots and lots of shareholders" is different than the "fair share" for businesses with less than 100 shareholders. Right?
Jan 6, '10
Nick Christensen:
You make a fair point, and it is probably true that the reporter and editors had no intention to mislead here. However, the statement they made is in fact wildly inaccurate, and there would have been many ways to reduce wonkiness and condense without making false statements. Instead of: All companies would pay the new minimum tax or the 7.9 percent tax on profits, whichever is higher. they could have said, "Most companies would be unaffected. Certain types of companies will pay the new minimum..."
I think 5 words is a small price to pay to avoid misinformation.
And, Nick, you act as though this is not demonstrative of a problem. In fact, the media routinely misstates facts because they continue to cut their reporting staff and rely instead on PR flacks to do the work for them. They have calculated that doing the hard work of actual journalism isn't really necessary, folks won't notice the difference, and the alternatives are expected to generate more profit for shareholders.
It is entirely possible Mr. Jaquiss took a shortcut and lifted his description of M67 from a OAJKT press release.
2:49 p.m.
Jan 6, '10
Not all 'C' corporations have "lots and lots of shareholders". I co-own a 'C' corporation. There are two shareholders. My business partner and myself.
Sorry, you are correct. "Lots and lots" is nonspecific on my part. As Brian notes, C-Corporations have unlimited shareholders. S-Corporations have less than 100 (used to be less than 35).
My point, however, is that nearly all companies in Oregon are S-Corporations, LLCs, and LLPs. Relatively few are C-Corporations. To say all "companies" would pay a higher tax is simply inaccurate.
Which leads us to what Nick wrote: as journalists, we are constantly under pressure to make things shorter/more succinct/easier to understand/less wonky.
I agree. Shorter, more succinct, easier to understand, and less wonky are all worthy goals. But not if doing that leads to inaccuracy or confusion.
It's not as if "C-Corporation" is some deeply mysterious technical term. At a minimum, every single business owner in Oregon understands the various ways to organize a business -- after all, they've had to choose amongst those choices.
It adds almost nothing to the sentence length, but much to the clarity to simply say:
If you need clarity, you could add another parenthetical note immediately following.
Not so complicated.
3:16 p.m.
Jan 6, '10
@Nick Christensen,
I strongly agree with the (curiously anonymous) "Sir Humphrey Appleby."
Being concise is fully compatible with being accurate -- a skilled journalist makes it his or her business to balance those needs effectively.
The utter (and substantive) inaccuracy of the piece quoted is, I think, a great embarrassment to both the journalist and the publication in question.
No, their piece need not look like Kari's; Kari is writing to a different audience. But it should not propagate misinformation.
Unfortunately, the Oregonian and the Willamette Week seem oddly willing to sacrifice their reputations for accuracy these days. It's strange to see them make mistakes of this nature, and then blame other parties for their decreasing relevance.
3:23 p.m.
Jan 6, '10
Yes, there were a number of inexactitudes in the explanation of the corporate tax changes, but overall I thought Nigel did a much better job of explaining the issues around the two ballot measures than most reporters. And I do not for a minute believe that he simply took anyone's press release as his source.
Jan 6, '10
Quote: "Sir Humphrey Appleby" And, Nick, you act as though this is not demonstrative of a problem. In fact, the media routinely misstates facts because they continue to cut their reporting staff and rely instead on PR flacks to do the work for them. They have calculated that doing the hard work of actual journalism isn't really necessary, folks won't notice the difference, and the alternatives are expected to generate more profit for shareholders.
It is entirely possible Mr. Jaquiss took a shortcut and lifted his description of M67 from a OAJKT press release. END QUOTE
The first paragraph is completely inaccurate. The second would be libelous if the word of an anonymous poster to Blue Oregon mattered.
Jan 6, '10
Summarization is no excuse for inaccuracy. Still, as I've said before when I or colleagues screw up, if baseball players got it right 99.9 percent of the time like journalists do, they'd all be billionaires.
Few of us have the time, energy and resources to double check every single thing we write. Fewer of our employers have the resources to do that for us. It's not an excuse, just the way it is.
4:50 p.m.
Jan 6, '10
Most (about 2/3) businesses (a better word than "companies," in my humble opinion) in Oregon are proprietorships which will pay nothing more under Measure 67.
Businesses that pass profits through to owners -- partnerships, limited liability companies (LLCs), limited liability partnerships (LLPs) and "s-corporations" (corporations with a limited number of shareholders that elect to pass through profits to shareholders instead of being subject to the federal corporate income tax) -- pay just $150.
And among c-corporations, those corporations that are subject to the federal corporate income tax, about 70 percent will pay either $150 (49 percent of C-corps) or will pay no additional tax under Measure 67 (21 percent of C-corps). Put another way, only about 30 percent of C-corps will pay more than $150 minimum tax or some additional tax under the new tax rate for companies with profits of $250,000 or more.
5:10 p.m.
Jan 6, '10
@Nick, I can appreciate where you're coming from -- but the talk of percentages gets old.
A journalist, presumably, puts the attention into a story to be able to identify the facts and figures that are vital to the understanding of the subject in question. Resources, presumably, may be allocated in such a way that the very most important facts are checked rigorously.
If 99.9% of journalism's facts and figures are correct, but the 0.1% is enough to swing an election…I think the issue becomes more clear.
And much as I like a good sports analogy, the one you make only further obscures an important issue.
Jan 6, '10
A little specificity would go a long way
If these measures pass, will businesses and "the rich" finally be paying their "fair share?" If not, can you please state specifically what amount as a percentage of either sales(income) or taxable income that might be.
As a business owner who would like to try and make some plans for the future, any info would be greatly appreciated.
Thank you.
9:25 p.m.
Jan 6, '10
I'll agree with Jack Roberts. As I posted above, Nigel's piece was a good rundown of the issues - better than most. And I also don't believe for a minute that Nigel relied on PR flackery.
9:27 p.m.
Jan 6, '10
I should probably say that I feel a little bad about picking on Nigel for this -- the Oregonian's been making this mistake (deliberately?) for months now.
Nigel's item was just the straw that broke this camel's back. Perhaps precisely because the rest of the piece was so good.
Jan 6, '10
Check out Peter Wong's journalism in the SJ. I realize that isn't a Portland paper, but he has done dynamite work and his paper allowed him front page stories filling up much of an inside page as well.
Jan 6, '10
"The vast majority of companies in Oregon are organized as S-Corporations, LLCs, or LLPs."
Now we know why the vast majority of companies only paid the minimum tax.
ALL S-Corporations have no tax liability at the corporate level (the shareholder pays the tax at the shareholders' level), consequently S-Corporations always pay only the minimum tax.
11:20 p.m.
Jan 6, '10
@John, that's a pretty insightful observation. I've been wondering about that "most" Oregon businesses thing for some time, and what you say sheds some light on it for sure.
@Jack and Kari, your point is duly noted. I regret to say that I expressed some pretty strong opinions without RTFA.
Jan 7, '10
I phone-banked for a few hours the other night. I would estimate around 70% of people I reached would be voting yes. Less than 10% voting know, the rest undecided. What that might mean, I don't know, but it certainly made me feel a little better about our chances for victory.
Jan 7, '10
joshua Welch commented: I phone-banked for a few hours the other night. I would estimate around 70% of people I reached would be voting yes.
Phone-banked for who? Calling a truly random sampling of voters? Registered Democratic Party voters? Independents?
3:15 p.m.
Jan 7, '10
You contradict yourself. The $150 IS the new minimum tax, and all but sole-p's will pay that. You're saying only C-corps MIGHT pay either, but all WILL pay either--even if it's because they pay one of them specifically.
Jan 7, '10
Now we know why the vast majority of companies only paid the minimum tax
<h2>That doesn't negate the fact that 19,691 C-Corps paid the minimum because they had no taxable income.</h2>