Raising the Oregon Corporate Minimum Tax

Photo credit: flickr user https://creativecommons.org/licenses/by/2.0/legalcode

Photo credit: flickr user https://creativecommons.org/licenses/by/2.0/legalcode

Oregon has a reputation for being a liberal state, however its government is starved for revenues because corporations have not been paying their fair share. Oregon collects a lower percentage of revenues from corporations doing business in-state than anywhere else in the US, and spends less per K through 12 student than all but a handful of states. Oregon does not have the power to increase taxes through the normal legislative process because republicans in the legislature will not vote for a tax increase.

Measure 97 on the ballot in Oregon this November would rectify this situation and help bridge the gap between reputation and reality. The measure would raise the corporate minimum tax on corporations with more than $25 million in sales in the state from 0.5% to 2.5%. The Legislative Review Office estimates that Measure 97 would increase state revenues by $3 billion per year, or roughly 10%, which the measure specifies must be spent on K-12 education, healthcare, and elder care programs - all of which are terribly underfunded.

This initiative is noteworthy for a number of reasons:

1. There is a strong consensus among progressive organizations in the state that the government is seriously underfunded because corporations have been getting off scot-free. However, although the measure does not affect small businesses - and may even benefit them relative to their larger competitors – the business community in Oregon as a whole tends to oppose this measure. It is predicted that the campaign against Measure 97 this fall will break all spending records in Oregon.

2. Right wing anti-tax campaigns have been successful in many states. They generally take the form of limiting increases in property taxes. This has broad appeal at the ballot box because property taxes can increase even when owners’ incomes are not rising comparably or at all. Polls of likely voters indicate little support for proposals to lift limits on increases in property taxes to solve revenue shortfalls, but indicate strong support for Measure 97 which increases taxes instead only on large corporations.

3. Measure 97 is truly unprecedented. It is not a tax on corporate profits - which corporations have become adroit at hiding - or a general gross receipts tax, as it applies only to some firms in an industry. In fact, only 1051 corporations - less than one quarter of one percent of all businesses in Oregon - would be affected at all, and the Legislative Review Office estimates that over half of the tax would be paid by as few as 50 corporations.

It remains to be seen whether this strategy to defeat underfunding of public services and corporate tax avoidance will prove successful. If Oregon passes Measure 97 this November, progressives in other states would do well to take notice.