This November, voters in Oregon will be asked to approve a ballot measure that would hike taxes on businesses in the state.
If approved, the Oregon Business Tax Increase Initiative, officially designated as Measure 97, will establish a minimum tax of $30,000 on corporations in the state and add additional taxes on revenue exceeding $25 million per year.
If approved, Measure 97 would not replace existing income and alternative minimum corporate taxes paid by business owners in Oregon, but it would instead add to the cost of doing business in Oregon.
‘Largest Tax’ in History
Jason Williams, the president and cofounder of the Taxpayers Association of Oregon, says Measure 97 is historic for all the wrong reasons.
“This is the largest tax in Oregon history,” said Williams. “[The tax] increases total state taxes by 25 percent and will cost families over $613 a year in higher consumer prices. In 2009, the politicians raised $1 billion in new taxes on income, gas, hospitals, and business. They spent it all and are now back for more—this time $6 billion more. When those taxes hit, we saw businesses vanish. New start-ups in Oregon were at record lows and faring worse than the national average.”
Williams says Measure 97 is a “hidden sales tax.”
“Measure 97 is a hidden sales tax that will drive up costs, prices, and taxes,” Williams said. “This hidden sales tax on gross receipts is a much worse form of taxation, because it is hidden from the public and it creates all kinds of double- and triple-taxation nightmares.”
$2.65 Million per Company
Eric Fruits, an adjunct professor of economics at Portland State University, says the proposed tax would harm thousands of Oregon businesses.
“The tax is applied to any corporation with $25 million or more in sales in the state of Oregon,” Fruits said. “It’s widely accepted that about 1,000 corporations in Oregon satisfy these criteria. A company with $30 million in Oregon sales would see taxes increase by $125,000. A company with $50 million in sales would see taxes increase by $625,000. The most-cited estimates project the tax would raise $2.65 billion a year, spread over 1,000 corporations subject to the tax. [This suggests] an average per-firm tax increase of $2.65 million a year.”
Huge Impact on Consumers
Hiking taxes on businesses means raising prices for consumers, Fruits says.
“In fact, much of the tax will be passed on to customers,” Fruits says. “If those customers are also corporations subject to the tax, then those higher costs will also get passed on. This is known as pyramiding. Every corporation along a supply chain would see an increase in their taxes, along with increased prices from the previous stop in that supply chain—because of the tax increase that is passed on.”