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About Northwest labor press. (Portland , Ore.) 1987-current | View Entire Issue (Oct. 2, 2009)
OCT. 2, 2009 :NWLP 9/29/09 9:53 AM Page 3 Through ballot referenda Business groups force vote on tax hike on corporations and the rich It appears Oregon voters will get the final say on whether the state’s wealth- iest individuals and corporations should pay just a little more taxes. The Democratic majority in the Oregon Legislature this year passed laws in- creasing the $10 corporate minimum income tax and adding a new top per- sonal income tax bracket on house- holds with over a quarter million dol- lars a year of income. The amounts of the increase were quite modest, but some Republican ac- tivists formed a group called Oregoni- ans Against Job Killing Taxes and raised and spent nearly $1 million from business groups to fund a paid signa- ture gatherer operation. The group turned in signatures Sept. 25. If the sec- retary of state finds there are at least 55,179 valid signatures on each meas- ure, voters will choose in a Jan. 26, 2010 special election whether to let the tax increases go forward. A “yes” vote is a vote for the in- creases. Or, as Scott Moore — spokesperson for the union-backed community coalition Defend Oregon — put it, “Vote yes for tax fairness.” Oregon’s corporate minimum in- come tax has been something of a scan- dal for years. Two-thirds of corpora- tions doing business in Oregon — including some of Oregon’s biggest corporations — have been paying only $10 a year in income tax, an amount that hasn’t been raised since 1929. The corporate minimum is the amount of income tax paid by corporations whose books don’t show a profit in a given year. Under the new law, the corporate minimum increases to $150 a year for corporations with under $500,000 a year in Oregon sales, rising to $100,000 for companies with more than $100 million a year in sales. The non-profit think tank Oregon Center for Public Policy found that even with the increase, corporations will still pay a smaller share of taxes than three decades ago. When the cor- porate tax measure takes full effect in the 2013-15 budget cycle, corporations will pay 6.8 percent of the state’s in- come taxes, with individuals paying the remaining 93.2 percent. The corporate share is 6.3 percent now; 35 years ago it was 18 percent. Meanwhile, Oregon’s personal in- come tax has been essentially a flat tax of 9 percent on the taxable incomes of all but the poorest. The new law tem- porarily raises the top marginal rate on taxable income to 10.8 percent for household incomes over $250,000, and 11 percent on taxable incomes over Oregon’s minimum wage to stay at $8.40 next year Due to a decline of 1.48 percent in the Consumer Price Index (CPI) from August 2008 to August 2009, Oregon’s minimum wage will remain at $8.40 an hour next year. Enacted by voters in 2002, Oregon’s minimum wage law requires an annual adjustment based on inflation as meas- ured by the CPI. The commissioner of the Bureau of Labor and Industries (BOLI) is charged with adjusting the minimum wage for inflation every September, rounded to the nearest five cents. The law specifi- cally ties the minimum wage to in- creases in the CPI, leaving no option for a reduced wage when the CPI de- clines. “While the economy still struggles, workers will be able to continue taking care of their families while maintaining their purchasing power and contribut- ing to the recovery,” said Labor Com- missioner Brad Avakian. “At the same time, employers who are in difficult fi- nancial situations can breathe a little easier because their labor costs will re- main constant.” Oregon is one of 10 states, with Washington, Vermont, Ohio, Nevada, Montana, Missouri, Florida, Colorado, and Arizona, that annually adjusts the minimum wage based on inflation and the CPI. The CPI, which is published by the U.S. Bureau of Labor Statistics, is a measure of the average change in prices over time for a fixed “market basket” of goods and services, such as food, shelter, medical care, transporta- tion fares and other goods and services people purchase for day-to-day living. $500,000. That rate drops back to 9.9 percent in 2013. Taxable income equals gross income minus deductions, so in reality the increase affects households earning rather more than a quarter mil- lion dollars a year — a taxpayer would typically gross $278,000 before their taxable income reached $250,000. The Legislative Revenue Office estimated that just 28,000 personal income tax- payers will pay more under the new law. And the higher rate doesn’t apply to all income, just the portion of in- come over $250,000, so for example, a couple with taxable income of $260,000 a year would pay an extra $180 a year. Nonetheless, the two increases are expected to raise over $350 million a year in additional revenue over the next two years. It was the Legislature’s way of protecting education, health care and public safety services during the reces- sion without imposing across-the- board tax increases. An early August poll by Grove In- sight for the Oregon Center for Public Policy showed that voters approve of the increase by a 2-to-1 margin — be- cause they are targeted at people and corporations who can afford to pay. “If they talk about the facts of these measures and who they really impact, we’ll win,” Moore said. “So they have to scare people into thinking the tax will affect them.” Moore predicts that opponents of the tax increases will spread misinfor- mation: The tax increases will be talked about in general terms, as if they affect most taxpayers, and will be blamed, without evidence, for job losses. “We know the other side has an extraordi- nary amount of money,” Moore said. The “no” campaign will be run by corporate lobbyist Mark Nelson, who in 2007 raised $12 million from to- bacco companies and defeated a ciga- rette tax increase that would have funded health care for children. So far, contributors to the campaign to undo the increases have included Associated General Contractors, Associated Ore- gon Industries, the Oregon Bankers As- sociation, the Portland Business Al- liance, and timber and oil companies. Oregon’s labor movement will likely be drawn in to defend the tax in- creases. At its final meeting before the Oregon AFL-CIO’s Oct. 25 convention in Bend, the labor federation’s Execu- tive Board will vote on a recommenda- tion to support the campaign. The campaign is getting started right away. In Portland, Defend Oregon is calling for volunteers to meet at the Machinists District Lodge 24 hall, 3645 SE 32nd Avenue, (just South of Powell Boulevard) Saturday, Oct. 3, at 10 a.m. to distribute literature. (International Standard Serial Number 0894-444X) Established in 1900 at Portland, Oregon as a voice of the labor movement. 4275 NE Halsey St., P.O. Box 13150, Portland, Ore. 97213 Telephone: (503) 288-3311 Editor: Michael Gutwig Staff: Don McIntosh, Cheri Rice Published on a semi-monthly basis on the first and third Fridays of each month by the Oregon Labor Press Publishing Co. Inc., a non- profit corporation owned by 20 unions and councils including the Oregon AFL-CIO. Serving more than 120 union organizations in Ore- gon and SW Washington. Subscriptions $13.75 per year for union members. Group rates available to trade union organizations. PERIODICALS POSTAGE PAID AT PORTLAND, OREGON. CHANGE OF ADDRESS NOTICE: Three weeks are required for a change of address. When ordering a change, please give your old and new addresses and the name and number of your local union. POSTMASTER: Send address changes to NORTHWEST LABOR PRESS, P.O. BOX 13150, PORTLAND, OR 97213-0150 OCTOBER 2, 2009 NORTHWEST LABOR PRESS PAGE 3
