It’s Groundhog Day, and Oregon is still stuck with one of the nation’s lowest business tax rates

Chuck Sheketoff

This Groundhog Day, Oregon woke up to the same sad reality. Our schools remain woefully underfunded. Too many Oregonians still lack health insurance. And, compared to the rest of the nation, businesses in our state do little to contribute to the common good.

For over a decade now, Oregon has been stuck at or near the bottom nationally when it comes to the “total effective business tax rate,” according to the Council On State Taxation (COST). Keep in mind, COST is a lobbying group representing about 600 corporations, including Nike and Intel. This is the corporate lobby speaking.

The most recent version of the study found that the total state and local taxes paid by Oregon businesses amounted to 3.6 percent of Oregon's private sector economy in fiscal year 2015. That edged out only three other states — Alaska, Connecticut and North Carolina — while being tied with three more — Michigan, Indiana and Missouri. That means our total effective business tax rate of 3.5 percent put us tied at 45th. The national average was 4.6 percent.

That Oregon’s effective business tax rate has been bouncing along the bottom is not surprising, considering how successful corporations doing business in our state have been in shedding their tax responsibilities. Over the decades, corporations have manipulated the tax system to their advantage. The result: as a share of the Oregon economy, corporate income tax contributions have shrunk by more than half since the late 1970s.

Oregon now confronts a $1.8 billion budget gap. This deficit threatens further cuts to schools and key services that benefit all Oregonians.

Now is a good time for Oregon lawmakers to say, “enough is enough.” Let’s stop re-living Groundhog Day by finally making businesses — especially big corporations — pay their fair share.


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.

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