It Doesn't Take a College Degree

Chuck Sheketoff

It doesn’t take a college degree to do the math and see the solution for adequately funding Oregon’s pre-kindergarten program, our higher education system, the effort to provide access to health care for all of Oregon’s uninsured children, or any of the other public structures that will come up short this legislative session.

Advocates for those and other programs are frustrated that neither the Governor’s proposed budget nor the budget announced by the co-chairs of the Ways and Means Committee provides adequate funding. The Governor and the co-chairs, however, are painfully aware that Oregon needs more revenue to build and maintain the public structures that all Oregonians value.

Oregon’s business community leaders are among the most vocal advocates for investing more in education, health care and economic development. Corporate Oregon just needs to look in a mirror to see how education, health care and economic development in Oregon can be fully funded.

The math is straightforward. With corporate income taxes providing only about seven percent of Oregon’s income taxes, down from about 18 percent three decades ago, it is no wonder that Oregon’s budget writers have concluded that Oregon needs more revenue to meet the demands of Oregon’s business community and others. Households are pulling more of the load because the business community has shirked its fiscal responsibilities.

And even though two-thirds of Oregon’s corporations pay just $10 a year in corporate income taxes, fixing the embarrassment known as the corporate minimum tax hardly solves the problem. None of the proposals for the corporate minimum tax will result in corporations paying their fair share of Oregon’s income taxes. The Legislature should fix the $10 tax, but that won’t be enough to restore fairness.

When Intel looks in the mirror, for instance, they see a company that 10 years ago paid over $50 million a year in income taxes. Today they are likely a ten bucks a year taxpayer.

Intel used to be Oregon’s largest corporate taxpayer and paid one-fifth of Oregon’s corporate income taxes. Intel used to boast about their income tax payments so they could get the ear of policymakers to make investments in education and other public structures. Unfortunately, Intel used their political power to lead an effort to slash the taxes paid by large manufacturers and others who sell the bulk of their products out of state.

Now Intel can – and does – only boast about all the taxes their employees pay. Under Intel’s logic, Oregon should increase the tax rates on Intel employees so that Intel would become an even better looking corporate citizen!

The Oregon business community is long on rhetoric about investing in education – from pre-K to higher ed – but refuses to pay their fair share in taxes on their profits. With Intel going from paying about $50 million a year in corporate income taxes to $10 a year – and other corporate giants such as Nike similarly shirking their tax responsibilities with their successful re-write of the corporate tax code – it doesn’t take a higher ed degree to figure out the cause of today’s funding challenges.

If corporate Oregon pulled the same share of the load that they pulled a generation ago, Oregon would have an additional $1.5 billion to fund education, health care, public safety and other public structures that Oregonians value. It doesn’t take a higher ed degree to realize all the good that would do for Oregonians and Oregon’s future.

  • Tom (unverified)
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    http://www.capmag.com/article.asp?ID=2686 A subject area in economics, called the incidence of taxation, says that the party upon whom a tax is levied does not necessarily pay the tax. They might shift it onto some other party. That's precisely what corporations do. They are merely tax collectors.

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    A subject area in economics, called the incidence of taxation, says that the party upon whom a tax is levied does not necessarily pay the tax. They might shift it onto some other party. That's precisely what corporations do. They are merely tax collectors.

    Are you suggesting that corporations like INTEL, which does business in all 50 states and in 60-70 countries would be transferring most state taxes collected to Oregon consumers?

    If intel does transfer these costs, and if it is true that they will pay the corporate minimum in 2006 or 2007, then isn't it likely true that Oregon consumers are being asked to pay some of the cost of taxes paid out by intel in other states and countries but are not recouping any of that money in the form of lost tax revenue?

  • YoungOregonVoter (unverified)
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    The real problem is that Oregon does not have enough business to continue funding the current system. We can blame this on many factors including "progressive" politics, sustainability, intricate land use laws that violate landowner's 14th amendment rights in the name of Urban Growth Boundaries, etc.

    Have we forgotten about why Louisiana Pacific left Portland, OR?

    I hear a lot of talk about sustainability and green buildings being the wave of the future, yet I ain't seeing it. If there is such a huge market for it here in Oregon that attracts people here from all the other states, then where are the green corporations who would love paying 17% corporate taxes and investing heavily in the public sector?

    I believe we should work on attracting business back into Oregon by keeping corporate taxes stable or lowering them and throwing out our land use system altogether. There is no reason that the State of Oregon should be in direct violation of the U.S Constitution by enacting a system of land use laws that violate 14th Amendment due process rights.

  • Dave Lister (unverified)
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    When analyzing the $10 corporate minimum you have to take into account all the "S" corporations and LLC's where the owners are paying the taxes on the profits at their much higher, personal tax rate. Raising the minimum is appropriate for "C" corporations.

  • YoungOregonVoter (unverified)
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    BTW, any astute student of John Locke and Thomas Jefferson would know that statements such as:

    "Life, liberty, and the pursuit of happiness" -Thomas Jefferson, Declaration of Independence

    "The reason why men enter into society is the preservation of their property." -John Locke, Second Treatise on Civil Government

    Both refer to private property. The pursuit of happiness can be read accurately as the pursuit of private property as Thomas Jefferson was a fervent student of John Locke.

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    Nice try, YOV. Except Jefferson, as did everyone else, believed that the state actually holds the true right to the land--which is why it's OK to take the land from a private owner via eminent domain, and why they put in a clause guaranteeing compensation when that happened. Note that there was no compunction about the actual taking of the land--because they believed it ultimately belonged to the state to begin with.

    And you might be surprised what Oregon's business community says about our land-use program. You might want to read the Oregon Business Plan's Backgrounder, specifically page 13 where they rate combating sprawl as a strength of the state, and note that it "has a track record of controlling sprawl," giving land-use planning specifically a 5 out of 5 score (where 5 is best), and a 4.7 for development and sprawl overall.

    As for "green" businesses, I believe Al Gore cited over 200 of them in Oregon right now, and the number continues to grow.

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    I have not forgotten why Louisiana-Pacific left Oregon...and it wasn't because of taxes. See http://tinyurl.com/2jgd9y

    Two-thirds of c-corps pay the $10 minimum tax, including at least three with revenues of $25 million or more. For a discussion of the decline of the corporate income tax, see The Great Corporate Tax Shift.

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    Re: Louisiana-Pacific. One point to Sheketoff!

  • BlueNote (unverified)
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    I am not a supporter of "sin taxes" but if the Oregon legislature can't get the votes to tax cigarettes - which are basically poison advertised as a "lifestyle choice" - I would not hold your breath waiting for the legislature to raise the minimum corporate tax.

    By the way, I think the minimum corporate tax in CA is now around $800.00 per year. Not sure if there are exceptions for Mom and Pop businesses.

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    A change in the corporate minimum tax laws is supported by the three largest business associations in the state, including the Oregon Business Association

    http://www.oba-online.org/cms/images/2007obalegag-business.pdf

    ...for exactly the reasons stated in the article. Businesses in this state need, and expect an educated, healthy workforce, and are very aware that the current system does not adequately provide for that. Businesses are not leaving Oregon because of the tax structure. If they are really are leaving at all, it is because they see the writing on the wall and Oregon's disinvestment in its own future, through the consistent underfunding of all levels of education and in the infrastructure of the state.

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    My link didn't post...You will need to paste it into your browser I think...

    www.oba-online.org/cms/images/2007obalegag-business.pdf

  • Rick Hunter (unverified)
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    "Public Structures?"

    Nice work Chuck...welcome to the latest poll tested political buzzword from the left. You saw it here first!

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    Chuck, you probably have this at your fingertips, but haven't economists disproved the link between high taxes and businesses fleeing states? Righties always instantly play that card, but in my memory, states with higher taxes generally retain their larger companies. (After all, they pay for infrastructure that the businesses use.)

    And if low taxes were so attractive to businesses, why has Oregon not done a better job of recruiting companies fleeing high-tax states?

  • LeoXXIII (unverified)
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    Chuck--well said. What is sad is our current state lack of leadership. Our Governor, if he chose, could stand up and put together a funding package that would fund all education--not pit it against each other--but that would take leadership. It is clear that standing tall and leading is not what he does best.

    It is also unfortunate that the legislature, both chamber held by democrats, have done little to help. If the democrats want to change the direction of the state--and the state of education--stand up and do it. They might be amazed by the support they would receive.

  • Dan (unverified)
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    Chuck,

    Since you brought Intel into this by throwing out the statement,

    "a company that 10 years ago paid over $50 million a year in income taxes. Today they are likely a ten bucks a year taxpayer." ,

    shouldn't you complete the other side of the equation?

    How many thousands more employees (and vendors, realtors, teachers, etc., etc.) serving Intel workers are now paying state income and property taxes?

    You and I both know that tax revenue attributed to this group is huge. Please be more intellectually honest in your arguement next time.

    Maybe the other guppie liberals who read this simplly nod their head like Ichiro bobble head dolls, but most people understand that taxes generated through Intel wages (and related property taxes) have paid their fair share.

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    "most people understand that taxes generated through Intel wages (and related property taxes) have paid their fair share."

    What does that have to do with Intel paying a fair share on their profits?

  • Dan (unverified)
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    TJ,

    You are choosing to ignore the point. Through Intel's growth and good business judgement, they've grown the Washington County labor base, which has resulted in many multiples of tax revenues to the State than the $50 million suggested by Chuck.

    If Intel decides it doesn't like a mandatory profit tax, and skips Oregon on a new production factility in favor or San Antonio, how effective will the mandatory tax have been?

    You see TJ, wages and property taxes (or sales tax) are better anyway. Corporations can adjust the income statement in any of a number of accounting changes. Wages and property values can't be adjusted using accounting techniques. If you W-2 wages say $65,000, then those are your wages. If you property taxes come out to $7,000/year, then there you have it.

    If Intel has record revenues, it doesn't mean they'll have any profits from the Oregon segment.

  • andy (unverified)
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    Why do people use the term "fair share" when discussing taxes? What exactly does that mean? Who could possibly know what Intel's "fair share" is? There is no such thing, it is just a tax rate.

    Personally my feeling is that Oregon should eliminate all taxes for corporations. We're in a competition with the other states for good business jobs so why not attract some employers. You can then tax the income that the employees receive.

    I'd also suggest a cap on personal income taxes. Make the cap at $100K per person per year or something along those lines. See if we can attract some more high wealth people to the state. Having a few rich people around is always a good thing. Not sure why so many people on this site are anti-business and anti-rich people. Who exactly do you expect to pay for all of those things that you keep wanting like health care, education, mass transit, etc? Poor people can't pay many bills.

  • YoungOregonVoter (unverified)
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    Well, no sense in arguing with a bunch of Portland, liberal elitists. The will of the people will show in the initiative process.

    I want ya'll to gut and throw away Measure 37. This will ensure another Measure 37 concerning private property is on the ballot in the next election cycles until the land use system is obliterated.

    Measure 7 passed with 53% in 2000 (struck down by the Oregon Supreme Court) Measure 37 passed with 61% in 2004 Measure 39 passed with 66% in 2006

    So far you guys have the failures of Measure 65 in 1998 and Measure 2 in 2000.

    The accurate score is 3 to 2 for those who believe in protecting Oregonians due process rights of private property.

    Torrid,

    Thank you for the history lesson. Are you counting 1 to 3 man nonprofits in those 200 green businesses? If they are 200 and continuing to grow, then how come the service industry is employing a bunch of 18-24 year olds? If the number is big, then one would reasonably expect to feel their impact.

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    You are choosing to ignore the point. Through Intel's growth and good business judgement, they've grown the Washington County labor base, which has resulted in many multiples of tax revenues to the State than the $50 million suggested by Chuck.

    How am I ignoring the point, when the point is whether Intel is paying a fair tax on its profits? You're the one trying to talk about other ways in which Oregon benefits--but those are based on taxation of individuals and OTHER businesses. We're talking about Intel's tax burden.

    And to answer Andy, we can quibble over the rate, but there's no question $10 is not a reasonable minimum. And since the corporate tax burden is currently about half what it used to be, it's not a hard argument to make that the current level is too low.

    Intel could leave for whatever reason it likes. Prudent tax rates should be an independent decision by Oregonians. And as has been documented, the link between taxes and where companies are based is weak.

    YOV-- good thing no one's proposing to gut and throw away M37. On green businesses, I didn't do the counting. I'm not sure what point your other questions serve; they don't seem to reflect any contradiction (just because you don't "feel their impact," for instance).

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    Jeff wrote "Chuck, you probably have this at your fingertips, but haven't economists disproved the link between high taxes and businesses fleeing states?"

    See http://www.ocpp.org/cgi-bin/display.cgi?page=nr040317 and http://www.epinet.org/books/rethinking_growth_(full).pdf

    State and local taxes are eight-tenths of one percent (0.8%)of the cost of doing business.

  • Dan (unverified)
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    TJ,

    You spoke quite clearly the liberal party line. Thank you. Your lack of ability to look at the complete picture with respect to how money flows into the State's tax receivables is completely expected.

    Hello Intel. I've a suggestion for you. Simply fire all of your workers that can be replaced by temps. This will allow you to hire them back without benefits at a lower wage. Your profits will go up. Sure, you'll pay more in mandatory taxes, but think of all the savings in benefits. The state of Oregon will have to pick up all of the health care costs as these working poor move onto the Oregon Health Plan.

    The actual pass through of your revenue to the State of Oregon will plummet, but at least you'll finally be paying your "FAIR SHARE" according to Torrid Joe.

    And State or Oregon, in order to make up for the lost revenue because "Intel could leave for whatever reason it likes" (what a bold statement TJ), make sure to raise the cigarette, beer, and gasoline tax (all favorites of the Libs) that will hit the working poor disproportionately hard. You may want to put in a few more slot machines while your at it.

  • Russell (unverified)
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    Maybe, just maybe, corporations look for more than tax breaks. Maybe they look at the quality of the infrastructure in an area(investment in public capital). Maybe they look at how educated the workforce is in the area(investment in human capital). Sure, they notice how much they'll have to contribute in taxes, but it's not the be-all-end-all in the process of choosing corporate locations. Intel or Apple or Microsoft would NEVER move their corporate offices to rural Oregon, even if they could get away with paying NO taxes. Rural Oregon doesn't value investment in public capital, or human capital. That's why 70-80 percent of the residents lack a college education. That's why the Jackson County libraries are closed. You think a corporation is more inclined to move their operation to Jackson County because the libraries are closed?
    It's not an accident that the most successful corporations set up offices in 'bluer' regions of the country. These bluer regions have voters who ELECT to pay higher taxes in order to attract these corporations. They pay higher taxes, and they attract jobs that pay more, jobs that see wage increases that far outpace the slightly higher tax rate. Despite conservative efforts to demonize taxes as a cost, they aren't. Taxes are an investment in the community and corporations are quite aware of that.

  • Dan (unverified)
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    Chuck,

    Your references lose their objective appeal when the first one checked is a left wing advocate of socialist(tax and redistribute) solutions.

    Matter of fact, you appear to be a leading contributor. Sorry, that doesn't do anything to back up your weak claim of little correlation between taxes and business decisions.

    Let's do better.

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    You spoke quite clearly the liberal party line. Thank you. Your lack of ability to look at the complete picture with respect to how money flows into the State's tax receivables is completely expected. Hello Intel. I've a suggestion for you. Simply fire all of your workers that can be replaced by temps. This will allow you to hire them back without benefits at a lower wage. Your profits will go up. Sure, you'll pay more in mandatory taxes, but think of all the savings in benefits. The state of Oregon will have to pick up all of the health care costs as these working poor move onto the Oregon Health Plan.

    Uh, Dan--Intel surely already HAS fired all of its workers that can be replaced by temps. They would do so regardless of the tax structure.

    I understand how money flows--but that has zero to do with whether the "person" known as Intel is paying its fair share of taxes on income, like the rest of us. Your insistence that what other people pay in taxes as a result of Intel should have anything to do with their own tax rate, is absurd. You seem to ignore the fact that the derivative revenue benefits to the state come only because Intel has realized profit for itself on the productivity of its workers.

    A company does not contribute to common revenue, without first taking advantage of common resources and procuring a net profit above other considerations. To skip the question of the tax burden on that profit before considering the impact of its profit generation, is disingenuous.

  • Dan (unverified)
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    Russ,

    You may want to ask yourself why those libraries in Jackson county are closed.

    Have any businesses or industry, that use to employee people, shut down or shrank considerably due to environmentalists shutting down portions of the forest?

    Thanks for making my point.

    When you have an anti-business philosophy (think the Fur shop in downtown PDX or the special business tax that has driven 13 of the 15 big venture capital firms out of Portland proper), pretty soon, you don't have as many businesses.

    Businesses leave, payroll taxes go down, services provided through tax revenue shrinks as well.

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    And Dan, I expect you to present your case as to why Professor Lynch is unqualified to comment on the relationship between taxes and business location. Which college's Economics Department do YOU chair?

  • Dan (unverified)
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    Uh TJ,

    How many temps does Intel employ. It sounds like you have the number.

    Actually TJ, employers don't just fire everyone they can and replace them with temps. In your anti-business mind site, that might fit the stereotype of your left wingnut opinion of how businesses operate, but it isn't how successful businesses operate.

    Successful businesses invest in their employees. They also reserve the right to move their margin production requirement, as well as labor and talent, to the place that most maximizes profit.

    If marginal return on investment in a lower tax state is materially higher than a higher tax state, guess where the new talent, and production equipment go?

    In Intel's case, the profits are shared by the workers in a much larger degree than most companies. Do you understand the concept of bonuses and stock options? These get taxed TJ. Do you understand the concept of high wages? Intel employees earn them. They don't employee many $10.00/hour temp workers.

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    Actually TJ, employers don't just fire everyone they can and replace them with temps. In your anti-business mind site, that might fit the stereotype of your left wingnut opinion of how businesses operate, but it isn't how successful businesses operate.

    Hey, that was your scenario, not mine. So now it seems you are saying Intel would NOT do this. So what was the problem again, since the ill effects you prophesied would not in fact come to pass?

    If marginal return on investment in a lower tax state is materially higher than a higher tax state, guess where the new talent, and production equipment go?

    Nowhere, according to the data, since taxes are not a primary indicator of where a company locates.

    Still no answer to the topical question, I see: why should Intel shirk its tax responsibility to the state that provides its profits?

  • BlueNote (unverified)
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    I will compare my leftist credentials to anybody on this blog, but this whole "taxing corporations" discussion makes no sense to me. If you and I shake hands and become 50/50 partners to manufacture lamp shades, there is no tax on our "company" (a partnership) but we will each pay Oregon income tax on our individual 50% share of the profits. But if we decide to form a corporation so that some idiot cannot sue us personally when he wears one of our "defective" lamp shades on his head while driving home drunk from a party, suddenly we are expected to pay tax at the "corporate level" before our profits are distributed and we (as before) pay tax at the individual level.

    Corporations are merely a tool. They should not be allowed to be used as a tax dodge (as many are - and this I think is the problem) and they should not be used as a tax whipping-boy.

    The people of Oregon should have the best public services in the country. K -12 Education. Higher Education. Police. Fire. Medical Care. Senior Services. Services to the Disabled Community. Services to Chronically Under-served Communities. Etc. Etc. Etc. Conversely, the people of Oregon must pay for a high level of public services by taxing THEMSELVES - not some mysterious "corporate interest" boogie man.

    I support raising the income tax and property taxes to provide more money for needed and necessary services. Anything else is just window dressing and likely to cause more harm than good in the long run.

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    "Corporations are merely a tool."

    Not in the US. Here they are people, just like you and me, for all intents and purposes. When the corporation receives income, it pays taxes just like you and I. As you say, you are paying for the protection of corporate status when you pay corporate taxes.

  • Dan (unverified)
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    TJ,

    I think you just said it best:

    " why should Intel shirk its tax responsibility to the state that provides its profits?"

    Earth to TJ: the State doesn't provide Intel with it's profits. Intel creates them through their own hard work, investments, and decision making.

    By the way, how many big public employers (employ more than 500 employees) have relocated into Portland in the past five years? How many have left?

    I know that the facts of reality are an inconvenient truth, but the numbers tend to speak for themselves.

    And yes, I've answered your question. The State of Oregon receives plenty from Intel.

    I need to get back to work TJ, that public funded pension you will enjoy needs to be funded so I'd better get back to work.

  • BlueNote (unverified)
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    As a person who spends 2000 (very enjoyable - ha ha ha ha) billable hours a year kissing the ass of an endless string of corporate CEO's, I still say corporations are merely a tool. (Still wonder why I use a fake name?) But seriously, why should corporations pay more tax than general partnerships or limited liability companies or limited partnerships?

    The real issue, in my opinion, is to immediately close the endless variety of tax loop holes used by all businesses - regardless of form - to avoid paying taxes. Why should a company be able to deduct the cost of buying (oops, lobbying) politicians? Also, close loop holes that allow businesses to deduct $500 bottles of wine at Pearl District restaurants as "ordinary and necessary business expenses". (You wont' get a lot of waiters supporting that measure.) Raise business property taxes so that the fair market value of every business property is taxed - no more special tax breaks. Quit allowing Mr. Williams and his friends to build endless condos without paying for the actual cost of infrastructure to serve the developments.

    Anyway, enough ranting. Time for my medicine.

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    Earth to TJ: the State doesn't provide Intel with it's profits. Intel creates them through their own hard work, investments, and decision making.

    And how do they do that? With the land, infrastructure, economic stability, public safety, natural resources and human capital PROVIDED BY THE STATE THAT HOUSES THEM.

    I have no idea how many corporations have left. Why has their leaving resulted in a large increase in payroll tax revenues for the state in the last biennium? Now THERE'S an inconvenient truth.

    At least you went on record saying that $10 represents Intel's fair share of taxes, in your opinion. It puts you on an island very few others are willing to inhabit with you, but at least we now know where you live.

    And if you expect me to apologize for the fully rational system of establishing a pension fund for workers, you might want to find a hobby to occupy you while you wait.

  • LT (unverified)
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    As someone who knows that the original meaning of Progressive grows out of the days of Teddy Roosevelt, I think we should distinguish between Intel and other major corporations, and the folks who (to use a previous example) get together to make lampshades. Perhaps sales per year or number of employees could be criteria for evaluating corporations.

    I happen to like the Hopeful Tax Reform which Sen. Frank Morse and others are advocating, as it has a number of parts rather than just one simple idea such as raising the corporate minimum tax.

    What we need is tax fairness. Yes, I do believe that a large corporation (esp. one which is national and not just Oregon) such as Intel or any other example should pay more in corporate taxes than someone who files an Oregon 40S individual tax return on at least $200 of Oregon taxable income. Look at the tax tables for this year's Oregon Income Taxes.

    But that isn't the whole story. As has been discussed everywhere from a Sunday Oregonian story to local discussions of school budgets, there is an imbalance between what Oregon spends on prisons and what it spends on schools. Discussions of the structure and functions of corporations, or even of the changes to the Oregon tax system in the last couple decades won't change that.

  • andy (unverified)
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    I'm still not sure what the big deal is. The tax rate in Oregon is 6.6% for corporations correct? Plus there is a tax on the personal property that the corporation owns and there is a mass transit tax in the Metro area.

    So why all the crying? 6.6% seems kind of stiff to me actually for corporate income. We might very well generate more tax revenue in total if that particular tax rate was reduced.

  • BlueNote (unverified)
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    Tax rates are for giggles. The issue is what "taxable income" do you apply the tax rate to.

    So your basketball company made 1 million adjusted gross. Cost of goods plus employees is 700K, which leaves 300K Buying (oops, lobbying) and Hawaii trips cost 100K Business expenses (Pearl Dist. Dinners) cost 100K Research and Development (Cheerleaders & Fun) cost 100K

    Wow, your "taxable income" = 0

    No tax this year, but maybe next year!

    My point - stop BS deductions, and quit worrying about minimum taxes.

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    YOV.. your pop-fart verison of John Locke is bemusing if nothing else.

    "It is true, governments cannot be supported without great charge, and it is fit every one who enjoys his share of the protection, should pay out of his estate his proportion for the maintenance of it." - John Locke, Second Treatise of Civil Government (1690), Chapter XI

    and stow your "Portland elitist" claptrap... jackass.

  • Chris Matson (unverified)
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    Damn! I recently paid my tax bill and it was more this year than last.

    Makes me mad that some large corporation paid less than I did, especially when I remember once upon a time when business and folk paid about the same.

    The problem with the discussion about fixing the corporate tax structure (and yes, I support resoring the balance) is that nobody is talking about relieving the tax burden on individuals. I mean really, while large corporations got away with carving out more and more tax giveaways for themselves, us working folk ended up picking up the tab more and more.

    To me, tax equity means restoring the balance by both raising the corporate tax while lowering the tax burden on working families and family businesses. It does not necessarily mean a windfall in state income (although there would be a slight overall increase nonetheless).

    In a consumer-driven economy, it is the consumer who dictates how business is run. And as the working class makes up the bulk of the consumer class, the more money that have the more they spend. The more they spend, the more business works to provide that demand. And the more that can be collected in taxes, despite a lower tax rate for working folk. Supply-siders seem to miss that important little fact.

    Now, here is the part that "progressives" should be really embracing. More money in the hands of the working-class does not necessarily mean that more will be spent on "disposable junk." In fact, I would argue that because working folk have less real money to spend, disposable junk is about all they can afford. Give them more disposable income, and a significant number will opt to spend their additional money wisely (not all, but a significant number will, and certainly more than those who already are).

    Simply increasing the tax on big business without a corresponding cut to the working-class will be nice in the short-run, but I fear it would only lead to long-term atrophy in the economy and subsequently the financing of state and local government.

    Real tax reform is just that...reform for all. So, initiate a restoration of tax equity by increasing the tax on thosew who can afford it most while reducing the already high burdon on those who can least afford it, and let simple economics do the rest.

    I believe some would call that real progress.

  • djk (unverified)
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    As I've said many times before: ditch the corporate income tax and impose a gross receipts tax. I would use Washington's Business and Occupations Tax as a model. There's a pretty strong argument for it, since we can look right across the Columbia and see how it works. There certainly hasn't been a mass migration of businesses from Washington trying to escape the tax, nor has the state economy tanked. And it's been around since the 1930's, so there's a good track record as to how it works.

    Tax the gross income of corporations and you go a long way to eliminating various tax dodges that as possible when only taxing net income.

  • Steve (unverified)
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    No one has given any guarantee that if we pay more taxes it will go to schools. Again, Teddy K is looking at a 20% upside in revenue and how much goes to reducing student-teacher ratios - 0%, its all for benefits.

    Do we really need more revenue when we have people like TJ with enough time on their hands on their govt job to make blogs all day long? Lets think about making things more efficient. Then you may just convince taxpayers to put up more money.

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    people like TJ with enough time on their hands on their govt job to make blogs all day long?

    You lapse into a fair bit of ill-informed assumption here.

  • Andy (unverified)
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    Chris,

    The working class doesn't pay much in taxes. What they pay wouldn't keep the government running for more than a few weeks a year. The vast majority of the income taxes are paid by the rich. Yep, the same rich people that progressives love to hate are the ones that pay the bills. Ironic isn't it? Eliminating the corporate tax completely would be a good experiment to run. Ireland has seen some pretty good results from their lower corporate tax rate and you're now starting to see the same effect spread thru the Eastern European countries. Many of those countries are adopting flat taxes and that is having the effect of pulling business out of high tax regions such as France and Germany. Oregon could play this game if we had politicians that thought at a higher level but I guess we didn't get around to electing that kind.

  • Sid Leader (unverified)
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    Anyone else notice that "Young Oregon Voter" throws a stinky bomb, then when we throw the defused bomb back in her lap, she runs away???

    If Oregon taxes (less than one percent) are hurting businesses, why are dozens of new businesses opening on Belmont, Division, Powell and even Foster Road?

    Hmmmm, YOV?????

    YOV sounds like a young, sheltered type, probably living at home in the comfy burbs, with Fox TV on 24/7, so I would suggest she come on down to Pudddletown some time... beats The Couv... every time!

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    To say that the poor don't pay much in taxes is a complete fallacy. First and foremost, they pay the highest rate of tax of "disposeable income" through sales taxes, etc. Sales taxes, etc. are the majority income for states and counties who have them. In addition, the tax credits and exemptions that the wealthy receive far outweigh what they pay in taxes. Federal tax credits (and I'm not talking the Earned Income Credit here) are in the billions of dollars of what even the IRS calls "lost revenue".

  • andy (unverified)
    (Show?)

    The poor don't pay diddly. The bottom 50% of wage earners only combine for about 3% of the total income tax revenue. That amount wouldn't keep the government running for more than two weeks per year. The rich pay almost all of the taxes. The top 10% pay around 70% of all income taxes.

    I don't have any idea what you mean about tax credits for the rich outweigh what they pay in taxes. The only thing that matters is the size of the checks that the rich write to the IRS. Those checks provide almost all of the income taxes that the IRS collects regardless of any tax credits or exemptions.

    Not sure why people argue over facts that are easily checked. Besides, shouldn't you be happy that those rich people that you hate pay so much in taxes? Just hope they never get around to deciding that they shouldn't need to pay so much in taxes to support such a bunch of losers who dislike them so much.

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    The poor don't pay diddly. The bottom 50% of wage earners only combine for about 3% of the total income tax revenue.

    <h2>Andy, would you mind updating those numbers to include payroll and sales taxes? Thanks!</h2>

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