Corporate-Funded Study Says Oregon Has Nation's Fifth Lowest Biz Taxes

Chuck Sheketoff

A corporate-funded study says that Oregon has the fifth lowest “total effective business tax rate” in the country, a ranking that takes into account the tax increases put in place by Measures 66 and 67.

The study conducted by the accounting firm Ernst & Young on behalf of the Council On State Taxation (COST) said that the total state and local taxes paid by Oregon businesses amounted to 3.8 percent of Oregon’s private sector economy in fiscal year 2010.

Businesses in only four other states — Connecticut, Delaware, Maryland and North Carolina — contributed a lower share in state and local taxes relative to the size of the state’s private sector economy, according to the COST study.

COST is an association of multistate and multinational corporations that lobbies for lower business taxes in states across the country. COST represents about 600 corporations, including major Oregon employers such as Nike, Intel, Hewlett-Packard, US Bank and Xerox.

The COST study once again documents that there’s room for Oregon corporations to contribute more to support the public structures from which they also benefit.

Read more: Corporate-Funded Study Says Oregon Has Nation's Fifth Lowest Business Taxes and discuss.


Oregon Center for Public PolicyChuck Sheketoff is the executive director of the Oregon Center for Public Policy. You can sign up to receive email notification of OCPP materials at www.ocpp.org.

Comments

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    Good one, Chuck. Prepare for the onslaught of smug dissembling and something about businesses moving out of Oregon.

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    Chuck, this is great news but I'm afraid you draw the wrong conclusion. I very much agree that this study refutes the common (but erroneous) charge that Oregon's tax system is anti-business or contributes to a bad business climate here.

    On the other hand, I don't see it as an invitation to try to create a bad business climate by raising taxes on business. In fact, I kind of like a rating that puts us in the company of states like North Carolina, Delaware, Connecticut and Maryland for a change, instead of Arkansas, Alabama and Mississippi.

    Why get in a hurry to screw it up?

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        Tom, reading your characterization of Oregon sounds pretty like the mirror image of the way many businesses talk about Oregon's business climate.

        Maybe if you think Oregon's that screwed up, you should move some place where you'd be happier?

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          I'm more of a stay and fight kind of guy. How about you?

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          The same could be said of people like Chris Dudley, and you, for that matter.

          It's all very glib to say "if you don't like it here, maybe you should leave."

          Yeah, so maybe all of those tea partiers should just move to some other country, since they seem to think it's so screwed up here.

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            No, Michael, because neither Chris Ducley nor I have ever talked about the need to "unscrew" everything about Oregon.

            It's one thing to want to improve the state; there are things you can do better no matteer where you are. But the constant running down of Oregon--whether from the left or the right--really gets tiresome and, I believe, counterproductive.

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              No, Michael, because neither Chris Ducley nor I have ever talked about the need to "unscrew" everything about Oregon.

              And neither did Tom. He cited four specific areas that he believes needs to be "unscrewed".

              And perhaps "Chris Ducley" has never talked about the need to "unscrew" things about Oregon, but Chris Dudley certainly did in his gubernatorial campaign.

              Read from the Bend Bulletin's endorsement of Dudley:

              Moreover, we believe Chris Dudley is committed more deeply than Kitzhaber to the kinds of changes Oregon needs right now. These include educational policy, spending reform and tax and regulatory policies that encourage job creation.

              Wow, that looks like four areas where Dudley believes we need changes.

              And, hey, let's go to a primary source, Dudley's answers in The Oregonian's voter guide (http://thevoterguide.oregonlive.com/race-detail.do?id=200383534):

              Decades of indifference to job creation won't be undone overnight, but my recovery plan has three specific goals: restore private sector job creation, control spending and reform the budget and educate for our economic future.

              That looks like three areas he wants to "unscrew".

              Oh, and here's a fourth:

              I believe in a balanced approached to using, conserving and managing our state’s natural resources. Too often, the scales have been tipped in favor of regulation and preservation at the expense of jobs and tax revenues. This policy has disproportionally impacted rural communities, which have Oregon’s highest unemployment and most fragile tax bases

              C'mon, Jack, you're better than this tactic of creating a straw man.

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                Michael, there's a difference between saying there are changes we can make that will improve the state and saying we need to "unscrew" the state.

                Chris Dudley was always consistent in saying he thought Oregon was a great state that could be made even better. Unfortunately, too many people (in both political parties) hear what they are already predisposed to hear.

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                  Jack, you're splitting hairs.

                  Tom used the "unscrew" language in response to your post where you stated "Why get in a hurry to screw it up?" You can't have it both ways--you can't refer to things being not the way you like them as being screwed up, then attack others for using the same terminology.

                  Oh, and Dudley's mention of "decades of indifference to job creation." That doesn't sound like he's saying this is a great state, it sounds like he's saying it's screwed up.

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                  Jack, here's an opportunity for you to tell someone else to leave because they think the state is screwed up:

                  http://nwrepublican.blogspot.com/2010/11/chris-dudley-loses-in-epic-fashion.html

                  What the Dudley campaign should have said...IMHO... Is that things are screwed up and we are going to start unscrewing them.

                  Oh, wait, he already left, but that's not stopping him from complaining that things are screwed up.

                  Oh, and he's on your side, so maybe you don't want to offend him too much.

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                    Too late, Michael. Coyote moved to Washington years ago.

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                      Right. As I noted.

                      Still, did you go on his blog and go after him for using the "screwed up" language?

                      Or, despite the image you try to present of being "more moderate than thou", do you only go after those on the left who use that language?

                      Did you go after Rob Kremer for using that language?

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              So what is the basic premise of Dudley's campaign slogan "Join Oregon's comeback."...?

        • (Show?)

          Maybe if you think Oregon's that screwed up, you should move some place where you'd be happier?

          Well, Jack, this sounds pretty much like the "love it or leave it" crowd.

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          Here, Jack, why don't you suggest that Rob Kremer move elsewhere:

          Joe Rodruiguez - you are the poster child for what is wrong with this state. Thank you for your regular reminders of just how screwed up this place is.

          http://robkremer.blogspot.com/2010/01/joe-rodriguez-poster-child-for-oregons.html

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          Chuck, just because taxes aren't always the dominant factor in establishing business climate, that doesn't meant the don't matter. A lot depends on what you're getting for your taxes. Continuing to pay more to get the same or less in services isn't a good bargain for businesses, families or individuals.

          I agree 100% with Jason's comment below (perhaps not surprising, since we're both in the same business). The report you cite is good news for Oregon. We need some.

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    As one who works in economic development, I'm not surprised by the results of the study. There's also another recent report pointing to Oregon as the #1 place in the country for manufacturing: http://www.aier.org/component/content/article/262-economic-bulletins/2473-competitiveness-and-business-costs

    I'd like to see Oregon keep the lower ranking on taxation, so I'd hope any proposal to increase taxes doesn't significantly impact the ranking - especially since the manufacturing study points to Oregon's overall low cost of doing business (which includes taxation).

    • (Show?)

      When it comes to state business tax climate according to the Tax Foundation, Oregon is better than most other states (ranked 14th), and when it comes to the corporate tax rate in particular it is ahead of Texas… the new mythical job creator state du jour for the GOP brand.

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    However, Oreon has one of the highest tax rates in the nation on personal income, thus hammering business owners twice. I know that the sales tax has been repeatedly turned down by voters, mostly out of mistrust of elected state senators and representatives. However, if a more stable revenue stream is desireable then it is time to again discuss the third leg, consumption tax (with exemptions for basic food, shelter and medicine).

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      No, no, no.

      The study included Oregon's high tax on personal income of business owners.

      The study also treated as a business tax “the individual income taxes paid by owners of non-corporate (pass-through) businesses.” As such, “the study factored in the impact of Measure 66, which raised personal income taxes for high-income earners,” Sheketoff said.

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    Chuck, Ya done it again, causing the rightists to spin comically against the data. "Corporations are people too"--except they have so many special privileges, including not having to pay their taxes.

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    Even assuming that lower taxes are a plus for attracting businesses to Oregon, this shows Oregon doesn't need any cuts to business taxes, and probably could raise them a bit. After all, if our business taxes are the tenth lowest, we'd still be in the bottom quintile -- we'd still "outcompete" most of the other states out there.

    Put any increased business taxes into higher education and improved infrastructure, and Oregon would be a much better place for business than it is today.

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      Yes, Doug, but only if we are smart about such investments. For examples, funding the Columbia River Crossing, touted by some as "improved infrastructure," would be a mistake and a large waste of new tax dollars. In higher ed, on the other hand, funding more "opportunity grants" and extending them to students studying online, as Tim Nesbitt suggested (here), could help create a more equitable and efficient higher ed system.

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    For those of you who claim that taxes don't make a difference in business recruitment, relocation or expansion, it's obvious you've never worked in economic development.

    No, taxes aren't everything, but they do (and can) play a significant role. Taxation wasn't the #1 reason facebook chose to locate in Oregon, but it played a major role. When comparing Oregon to other competing locations, our state won out. But if we get into a habit of raising taxes "just because there's room to do so" we run the risk of losing our competitive edge in this area.

    I am not anti-tax, and neither is Jack (his support of 66/67 is proof of that). In fact, the organization I work for (Economic Development for Central Oregon) supported Central Oregon Community College's bond measure in 2008 that has led to the opening of a new satellite college campus in Prineville, among other improvements to the campus in Bend. EDCO also supported keeping an expiring urban renewal tax and transferring it to a project to improve roads and transit.

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    What do you guys think of this study? http://www.taxfoundation.org/files/bp60.pdf Oregon is #14 in this one. I think the business environment is not horrible here. I think the people in the NW of the state are very very very anti-business and would endlessly confiscate profits if they could. However most of the legislators are more educated and practice some self control it seems. We are in this study ranked along with Miss and ARK.

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    It is axiomatic to US politics that Republican use of "screw" is acceptable, while Democratic use of "screw" is beyond the pale.

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