Northwest labor press., January 01, 2010, Page 2, Image 2

Jan. 1, 2010:NWLP
12/28/09
11:37 AM
Page 2
...Foes of Ballot Measures 66 and 67 using scare tactics
(From Page 1)
Oregon, the labor and community coali-
tion that is defending the increases.
Since Sept. 25, when Oregonians
Against Job-Killing Taxes turned in sig-
natures, the group has spent another $1
million on a direct mail and media cam-
paign arguing that the tax increases tar-
get small businesses, and will lead to
major job losses.
Both claims are demonstrably false.
To understand why, you have to know
more about the measures.
Measure 66 raises income tax rates
on taxable income above $250,000 for
joint filers ($125,000 for single filers).
Taxable income is the income after you
take deductions. All taxable income
above $15,200 a year for joint filers and
$7,600 for single filers is currently taxed
by the State of Oregon at 9 percent.
Measure 66 would temporarily hike that
to 10.8 percent on taxable income be-
tween $250,000 and $500,000 a year for
joint filers (half that for single filers);
and to 11 percent on taxable income
above that. Starting in 2012, those rates
would drop to 9.9 percent on all income
above $250,000 for joint filers
($125,000 for single filers.) The meas-
ure also eliminates income tax on the
first $2,400 of unemployment insurance
benefits received in 2009.
Opponents of Measures 66 and 67
point out that with most small busi-
nesses, profits are taxed as personal in-
come. But that also means all business
expenses are deducted from income, for
tax purposes. So lets say a mom-and-
pop business has $1 million in annual
revenue, but $800,000 in expenses —
rent, supplies, payroll, a car used for
business purposes, equipment that de-
preciates in value. Assuming no other
income, they clear $200,000, and don’t
pay a penny extra under Measure 66.
On the other hand, a small business
owner who netted $300,000 — that’s
equity group inc.
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PAGE 2
$25,000 a month — would pay an extra
$900 a year in taxes for two years, and
then $450 a year after that.
“Somebody who is making
$300,000, in this economy, is doing
pretty well, and asking them to pay a lit-
tle bit more to protect critical services
makes sense,” says Speaker Dave Hunt
(D-Clackamas), who led passage of the
tax measures in the Oregon House of
Representatives. Hunt says lawmakers
rejected calls from the business commu-
nity for an across-the-board income tax
increase, and instead crafted both meas-
ures specifically to avoid burdening
small businesses or working people.
Measure 67 applies to the corporate
income tax. Since 1931, corporations
whose books don’t show taxable income
have paid a corporate minimum income
tax of $10 a year. Measure 67 raises that
to $150 a year, except for corporations
with more than $500,000 in Oregon
sales, which would pay about 0.1 per-
cent of their revenue. Corporations with
over $100 million in Oregon revenue
would pay $100,000.
Opponents say it’s unfair to raise the
minimum, because corporations only
pay it when they’re not profitable. That’s
not accurate, Sheketoff points out. They
pay it when their books show no taxable
income from Oregon activities. Many
things can reduce taxable income, in-
cluding losses in previous years, which
can be rolled forward.
“This is why they have accountants,”
said Moore, the Vote Yes spokesperson.
“Their accountants are employed to
make sure they get out of paying taxes.”
The accountants earn their keep. The
NORTHWEST LABOR PRESS
corporate minimum is all the income tax
paid by two-thirds of the corporations
doing business in Oregon. In fact, ac-
cording to the Oregon Department of
Revenue, 104 companies that have over
$100 million a year in Oregon sales have
been paying $10 a year in taxes. And 77
of those are headquartered out of state.
Measure 67 also raises the tax rate on
corporations that do report taxable in-
come. Those profits are currently taxed
at 6.6 percent in Oregon. Measure 67
raises that to 7.9 percent on corporate
profits over $250,000 — in 2009 and
2010; lowers it to 7.6 percent in 2011
and 2012; and returns it to 6.6 percent
after 2012, for all corporate profits be-
low $10 million. Above $10 million,
profit would be taxed at 7.6 percent,
with all revenue generated by that extra
1 percent above the current rate dedi-
cated to the state rainy day fund.
Now you know the basics of the two
measures.
Sheketoff has been playing a merry
game of whack-a-mole debunking ex-
amples of small business owners who
would supposedly be hurt by the meas-
ure. The Eastern Oregon rancher who
told a newspaper he was all set to move
to Idaho learned from Sheketoff that in
fact he’d pay just $150 a year extra un-
der the measure. The Ethiopian restau-
rant owner pictured in an Associated
Oregon Industries newsletter as some-
one who would “feel the pinch” turned
out to be pinched only $150, and he told
Sheketoff he’s proud to pay taxes, and
angry his picture had been used without
his knowledge.
Then there’s Tillamook dairy farmer
Carol Marie Leuthold.You may remem-
ber getting a letter from her in late No-
vember. Hand-signed, it was mailed out
to 960,000 Oregon registered voters. In
it, she said she was worried that Meas-
ures 66 and 67 would hurt her farm and
the families it supports. Leuthold admit-
ted to the Oregonian that her farm oper-
ation would pay just $150 extra under
Measure 67, but said Measure 66’s per-
sonal income tax increase would affect
her, because she had income from activ-
ities unrelated to the farm. In other
words, she’s not the struggling farmer
the letter portrays: Her household’s tax-
able income of over a quarter million
dollars puts her in the top 3 percent of
Oregonians.
“The claim that small businesses are
going to pay this is not grounded in re-
ality,” Sheketoff said.
You don’t have to be Sheketoff to
play bunk-busters.Anyone familiar with
the measures can do it with opposing ar-
guments in the Voters’ Pamphlet that
was mailed out this week.
Associated General Contractors
(AGC) Oregon-Columbia Chapter,
(Turn to Page 3)
JANUARY 1, 2010