Oregon Business: The phantom exodus

Carla Axtman

From Ben Jacklet, Managing Editor of Oregon Business:

Well, here’s my own personal message to Mr. Phantom CEO: Don’t let the door hit you on the butt on the way out.

It’s not that I don’t care. I care deeply about the state of Oregon’s economy and would hate to see our job market deteriorate further. But the votes are in and the law is the law. And guess what? Oregon’s tax burden on businesses is far from the worst. It’s right there in the middle of the pack. Personal income tax is high, but that’s because Oregon has no sales tax. The end result is an imperfect but admirably progressive tax structure.

But it’s not the objective numbers that matter, apparently. “The far greater damage,” investor David Chen told the Oregonian, “is in how it disenfranchised business.”

Disenfranchised? Really? Did someone lose the right to vote?

Hardly. They just lost the vote. That doesn’t make you disenfranchised.

Jacklet goes on to note that the regions attempting to scavenge Oregon business (Idaho, Utah, Montana, Ohio and the city of Chicago) have much worse to offer in terms of tax burden for business. In other words, the grass ain't greener.

Jacklet continues:

My qualm with all of this after-the-vote crying of wolf is this: It does not help. As anyone who tracks real estate or the stock market understands, perception matters. Sending out apocalyptic messages that Oregon businesses are so fed up that they might even move to Idaho is not helpful. Vowing to take your hundreds of jobs and abandon the community that helped you build your company is not helpful either.

Discuss.

By Carla Axtman
March 26, 2010
  • msmelharmon (unverified)
    10:13 a.m.
    Mar 26, '10
    (Show?)

    "My qualm with all of this after-the-vote crying of wolf is this: It does not help. As anyone who tracks real estate or the stock market understands, perception matters. Sending out apocalyptic messages that Oregon businesses are so fed up that they might even move to Idaho is not helpful. Vowing to take your hundreds of jobs and abandon the community that helped you build your company is not helpful either."

    I'm becoming convinced that that is the point. If they can't win at the ballot box and their gloom-and-doom predictions don't come true right away, then the opposition will try and make their predictions happen no matter the cost. I mean, you can't expect them to admit that they were wrong in their predictions, can you? They are never wrong, dammit, never! (insert stamping of feet, balling of fists and whiny voice here)

  • Exit Oregon (unverified)
    10:26 a.m.
    Mar 26, '10
    (Show?)

    For the planner types, it's called "Voting with your feet."

  • Kurt Hagadakis (unverified)
    10:44 a.m.
    Mar 26, '10
    (Show?)

    Of course any that die will leave no tracks to follow out of state.

    Still a supporter of the measures, though. Have to object to Mr. Novick's use of the past tense, in recent articles, though. I didn't do much to campaign for it, but am working my butt off now defending it. It is impacting some people, though, I know, I know, I've learned, as did rw and Peri that we're flukes. No prob, we've sucked it up and are working for the program, so no complaints. Just saying, the work continues.

    The people still fighting for the lost cause do worse than posters have noted. They remove all facts from the discussion, as they have already been discredited. It is really not a question anymore that the Obama stimulus was a success, and a very adept bit of meatball surgery. The right likes to talk about patriotism. They should be. And the question should be, "just what is treason". For my money, they've seldom been ineligible for firing squad since Richard Nixon resigned. Call me a communist, but I'm with Fidel on that one. "Free speech does not mean crafting factually incorrect messages, designed only to bring down the government, and expect the government to not deal with it as such". And he has a further relevant thought for the far right. "Look at your educational level. How can you call yourself free?" Their misery craves our company.

    Carla has yet to demonstrate to me why finger pointing and guffawing at a scared, retarded, socially regressive troll is the way forward for the Republic. Constant attacks on their most brain damaged rhetoric only has merit if their rhetoric does. Which is it?

  •
    10:54 a.m.
    Mar 26, '10
    (Show?)

    Of course any that die will leave no tracks to follow out of state.

    Of course they will. The anti-tax-fairness folks are already seeing to it. Hence the Oregonian article that prompted the Oregon Business editorial in the first place.

    Carla has yet to demonstrate to me why finger pointing and guffawing at a scared, retarded, socially regressive troll is the way forward for the Republic. Constant attacks on their most brain damaged rhetoric only has merit if their rhetoric does. Which is it?

    It would make more sense if you simply asked me when I planned to prove to you that we ought to beat children and puppies.

  • mp97303 (unverified)
    11:20 a.m.
    Mar 26, '10
    (Show?)

    THe Tax Foundation, the same people who the I ♥ Taxes group always point to to show how low taxes are in OR, now have OR ranked 14th for 2010. OR had the 3 largest drop in rankings of any state last year.

    WA is now #9 NV is now #4

    Looks like some of our neighbors do have better business tax situations now.

  • LT (unverified)
    11:38 a.m.
    Mar 26, '10
    (Show?)

    Two new businesses opened in our part of town before January. The are still there. Another couple of new ones just opened in the general area.

    The complaints sound like whining to me. "We will take this to the voters" was a gamble that didn't pay off, but now the voters businesses count on as customers should feel sorry for their lost gamble?

    There was no real alternative. I found an old tape of a debate between Novick and McCormick and was listening to it last night.

    It sounded like McCormick was saying "if only the leadership had listened to us and adopted our plan verbatim without public hearings and the ability to ask questions in public, this never would have happened. "

    He wasn't talking specifics, he was talking theory.

    His campaign didn't provide specifics---why didn't the business groups publish their alternative proposals last fall and say "SEE! We have a better answer!"? Because they might have had to answer questions?

    Didn't David Chen run for office once?

  • anon (unverified)
    11:39 a.m.
    Mar 26, '10
    (Show?)

    Somone who should know told me that one of the major pet supply chains will be closing the doors on their Oregon locations as their leases expire. 1500 jobs. Watch for it.

  • Bob Wiggins (unverified)
    11:51 a.m.
    Mar 26, '10
    (Show?)

    Carla, one of the messages of the No on 66/67 campaign was that passage of the tax measures would result in investors and companies moving out of the state. Apparently the voters (and most commenters here) didn't believe that would happen. The business referred to in the Oregonian article is pretty big. If it moves, we'll know it. And regardless of what happens with that particular business, in the next 24 months, we'll have a pretty good sense of whether or not the predicted migration out happens or not. If it does, the No campaign was right on that issue (whether or not you agree with their stand on the merits of the tax increases). As many posters here are fond of saying, "you're entitled to your own opinions, but not your own facts." None of this changes the result of the election; the measures passed. But we have a real-world opportunity to see whether state tax changes affect behavior. Every time you or other Yes on 66/67 people try to "de-bunk" evidence that the taxes did have an effect on business behavior, it just makes you look like someone trying to justify an ideological belief, rather than someone trying to discern the truth. We'll know the truth in a couple of years. Bob Wiggins

  •
    12:15 p.m.
    Mar 26, '10
    (Show?)

    I saw the Oregonian item that cited the unnamed CEO. That was (unintentionally) hilarious. Why is he unnamed?

    Because he doesn't want to suffer the same fate as all the other businesses that claimed they'd have to cut jobs, move out of state, etc. Bloggers and others immediately jumped up and did the math for them.

    Memo to media: If anybody tells you that they're going to move or cut jobs, make them show you the math. It's the old high-school math homework rule: SHOW YOUR WORK. Anybody that claims that a one-tenth of one-percent tax on revenues is going to devastate their business is either bad at math or trying to make a political point.

  • LT (unverified)
    12:40 p.m.
    Mar 26, '10
    (Show?)

    "The business referred to in the Oregonian article is pretty big. If it moves, we'll know it."

    Yes, but I won't hold my breath.

    So much of the OAJKT campaign was theory or gimmicks, that anyone has a right to be skeptical.

    And ponder this:

    Marion County went for Yes on 66 & 67 by the smallest of margins.

    The people who worried about "killing Oregon jobs" had their bakery commercial filmed in California. Gee, that created a lot of Oregon jobs!

    More importantly, the last line was stupid!

    "Thanks a lot, Salem" might have impressed a political consultant.

    But the employee of one private sector business was really angry.

    A columnist for the Salem Statesman Journal wrote about the stupidity of that line.

    Salem is Willamette University, Salem Hospital, downtown Salem (incl. a shopping mall called Salem Center), not to mention S. Salem, W. Salem, North and Northeast Salem. It is a city of activist neighborhood organizations. It has a city council with a mayor and strong city manager form of government.

    Residents driving on a certain stretch of State or Court street will drive by the state capitol, where the legislature meets to make state decisions. People from all over the state come to that building: legislators, staff, lobbyists, etc.

    Residents of the city of Salem know that they don't make state decisions, the legislature does.

    Some of us wonder if the "thanks a lot, Salem" tagline in the ad didn't push some undecided voters into the yes column because they found it insulting.

  • KenRay (unverified)
    12:43 p.m.
    Mar 26, '10
    (Show?)

    Well, whether you are willing to admit it or not, the measures have already had an effect on some jobs. I work at a car dealership and we are the kind of high-gross, low-net operation that the gross receipts tax part of your bill affects the most. Of course, a lot of people probably didn't notice that part of the measure since your side was very careful to only say it would raise the corporate minimum from $10. Your pro-tax campaign was very clever to ignore the gross receipts part and the fact that it was retroactive back to last year.

    Anyway, my mom, who used to work at another dealership, was laid off about a week after your referendum passed. I don't blame the business. After their tax bill jumped by a couple hundred thousand, they had to cut fixed expenses. It especially hurts when you get taxed for gross receipts earned over a year ago because you never had the ability to budget for that.

    But when you all pretend that this is about businesses packing up and leaving the state, you miss the point about the businesses trying to stay afloat. If you supported this gross receipts tax increase measure, own that. You own the bad stuff too, not just the stuff you say is good.

  • LT (unverified)
    1:39 p.m.
    Mar 26, '10
    (Show?)

    Kenray, I have been laid off from jobs when there was no ballot measure to blame.

    It is always tough to lose a job--whether with warning or with a "don't go to work tomorrow" phone call.

    Lots of people are losing jobs because of the recession. Not all of them because of a ballot measure.

    You do realize public sector workers would have lost jobs if the measures failed, don't you---people who then would have had no money to buy cars after losing their jobs.

  • KenRay (unverified)
    2:09 p.m.
    Mar 26, '10
    (Show?)

    In this case there is causation.

    Just because you don't like the answer, doesn't mean it isn't true.

    I don't want anyone to lose a job for no reason, but as far as pure economics are concerned then I would rather see a public job eliminated.

    No matter how useful or needed, public sector jobs are overhead expense to the macro-economy. Government does not create productivity or economic growth. So the result of this ballot measure is to ensure the continued unabated growth of government employment at the expense of private sector jobs. It is exactly backwards from what grows an economy.

    No sour grapes here. Your side won. The economy is weak; government grows. Since the economy is weak, The Leviathan wants more and more taxes to continue its growth. More and more taxes weaken the economy more; the cycle continues.

  • msmelharmon (unverified)
    2:58 p.m.
    Mar 26, '10
    (Show?)

    "We'll know the truth in a couple of years. Bob Wiggins"

    Exactly. And until then, the NO side needs to stop running around saying "the sky WILL fall, the sky WILL fall" or "the sky IS falling" until it actually happens. Until then, everyone needs to take a breath....and wait.

    Not that it'll matter. No matter what happens, both sides will run a poll in two years showing their side was correct. You know--lies, damn lies and statistics.

  •
    2:58 p.m.
    Mar 26, '10
    (Show?)

    Your pro-tax campaign was very clever to ignore the gross receipts part and the fact that it was retroactive back to last year.

    There was nothing retroactive about it. The bill was passed last year. What we voted on wasn't whether or not to pass it, but rather was on whether or not to repeal it.

    Ironically, all the talk about "retroactive" was precisely the kind of ignoring the actual facts which you are very mistakenly trying to pin on the wrong party.

  • KenRay (unverified)
    4:09 p.m.
    Mar 26, '10
    (Show?)

    "If it walks like a duck and quacks like a duck..............."

  • mp97303 (unverified)
    10:02 p.m.
    Mar 26, '10
    (Show?)

    Kev

    How the heck do you define retroactive. The bill was signed by the Governor on July 20, 2009. The tax increase took effect January 1, 2009.

    Legal Dictionary

    Main Entry: ret·ro·ac·tive Pronunciation: "re-trO-'ak-tiv Function: adjective : extending in scope or effect to a prior time or to conditions that existed or originated in the past; especially : made effective as of a date prior to enactment, promulgation, or imposition retroactive tax> —see also EX POST FACTO LAW

  • LT (unverified)
    11:10 p.m.
    Mar 26, '10
    (Show?)

    mp--give it a rest.

    When the legislature passed the law, it would have gone into effect as scheduled in the legislation.

    But some people with a lot of money decided to gamble that money on "taking it to the voters".

    If they thought "the voters" would cast votes exactly the same way as they did on Measure 30, they made a bad bet.

    Had the legislation gone into effect as the legislature planned, would the tax have been "retroactive"?

    Or was this all about the delay to have the ballot measure campaign?

  • Mike M (unverified)
    12:02 p.m.
    Mar 27, '10
    (Show?)

    LT,

    Why did Gov. K. delay the signing of the bill?

  • LT (unverified)
    12:16 p.m.
    Mar 27, '10
    (Show?)

    Mike M---you expect me to know?

    When Republicans were in control of the legislature, they could have passed a bill saying "if a tax measure looks like it may be challenged by referendum, it shall be the duty of the Gov. to sign that bill within ___ days, no matter what other bills are pending".

    If a Gov. vetoed that bill, there would have been major headlines.

    I don't recall such headlines.

    Mike, your time might be better spent going out and campaigning for the Gov. and legislative candidates of your choice than by blogging.

  • mp97303 (unverified)
    2:04 p.m.
    Mar 27, '10
    (Show?)

    LT

    The bill was signed by the Governor on July 20, 2009. The tax increase took effect January 1, 2009.

    That is by definition: RETROACTIVE.

    The referendum had no bearing on it being retro or not.

  •
    2:33 a.m.
    Mar 30, '10
    (Show?)

    KenRay wrote: After their tax bill jumped by a couple hundred thousand, they had to cut fixed expenses. It especially hurts when you get taxed for gross receipts earned over a year ago because you never had the ability to budget for that.

    Sorry, KenRay, I call bullshit. The maximum gross reciepts tax under Measure 66 was $100,000 - not "a couple hundred thousand". And in order to hit that $100k mark, you'd have to have over $100 million in gross sales in Oregon.

    Show me an Oregon auto dealer that had $100 million in gross in-state sales, and I'll show you an auto dealer that still didn't pay more than $100,000 in the minimum tax.

    Stop with the bullshit already. If you're going to make claims, show your work. Do the math. Read the damn flowchart.

    <hr/>

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