Street Roots • March 18-24, 2016
Commentary
Page 13
More disgraceful than the lottery: Oregon’s corporate income tax
J u a n Carlos Ordonez
is com m unications
director fo r the
Oregon Center fo r
Public Policy (www.
ocpp.org). The Center
uses research a n d
analysis to advance
policies a n d practices
that improve the
economic a n d social
opportunities o f all
Oregonians.
BY JUAN CARLOS ORDONEZ
C O N T R IB U T IN G C O L U M N IS T
f you want a glimpse of the shameful
state of Oregon’s corporate income tax,
look no further than your nearest bar or
restaurant with a video lottery machine.
Walk inside and you might see someone
sitting alone, gambling for hours until the
machine has vacuumed their wallet clean.
Such players make up a small slice of those
who bet on video slot and poker machines,
but the piles of cash they lose each year add
up to the majority of the revenue collected
by the Oregon Lottery, according to an
investigation by The Oregonian a few years
ago.
A separate analysis by the state’s paper
of record last year determined that more
than half of the roughly 12,000 video lottery
terminals can be found in lower-income
neighborhoods. That finding was consistent
with studies concluding that state lotteries
generally bring in most of their money from
poor people praying for a lucky break.
What does this have to do with Oregon’s
corporate income tax? Nothing less than the
fact that the Oregon Lottery puts more
money into state coffers than the corporate
income tax.
That’s right. A tax paid mainly by
Oregonians struggling to make ends meet or
with a gambling addiction (or both) does
more to support our state’s schools and
other vital public services than Bank of
America, Verizon, Walmart and ail the other
corporations doing business in Oregon
combined.
This scenario is even more shameful
when you consider the inefficiency — as a
source of state revenue — inherent in the
Lottery. Of the $1.1 billion lost by players
last year to the Oregon Lottery, only about
half (49 percent) wound up transferred to
the state to help fund public services. About
19 percent went back to players in the form
I
Life of Ours
by Aurora Le'Noiree
This life of ours - streets and shelters.
People claim we can do better - or need to go.
Where we’re told to get up with little re s t
Some so medically disadvantaged; mentally frail,
emotionally low, hated
by an undiscriminating social stance.
Monetary status,
disqualified as equals; less than,
revolutionaries before a nation formed - tom.
By a new monarchy ruling; this life of ours.
of prizes. The remaining third (32 percent)
of the money lost by players went simply to
pay for the lottery itself — to cover the cost
of commissions, salaries, equipment,
marketing and the like. (Compare that to
the efficiency of the Oregon Department of
Revenue, which administers the income tax
and other tax programs: Its budget amounts
to less than 2 percent of the tax revenue it
collects.)
It wasn’t always this way.
Before the Oregon Lottery came into
being, the corporate income tax was a much
better contributor to the common good. In
the mid-1970s, corporations paid about 18
percent of all income taxes collected by the
state. Today, the corporate share has
shrunk to about 7 percent.
Over the decades, corporations
succeeded in gaming the tax system. Their
lobbyists at the state capital earned their
keep by obtaining a bevy of corporate
loopholes and subsidies. Their lawyers and
accountants also served them well, devising
clever ways of avoiding taxation.
Corporations succeeded to such an extent
that, in recent years, some corporations
with profits in the millions even managed to
pay zero in Oregon income taxes — in spite
of Oregon’s modest corporate minimum tax.
But just because corporations have shed
much of their tax responsibilities, it doesn’t
mean that they thumb their noses at what
the tax system offers. One the one hand,
the tax system pays for, among other things,
the schools that educate aftd brain their
workers, the courts that resolve then-
disputes and the public safety services that
protect their property. On the other hand,
the tax system directly subsidizes
corporations through a long list of tax
credits, deductions and subtractions.
In 1984, still reeling from the impact of a
severe recession, Oregon voters approved a
ballot measure establishing the Oregon
Lottery. Eight years later, the lottery
reached a “milestone” with the introduction
of video lottery games — “the first 24-hour,
centrally controlled gaming system in the
country,” the lottery boasts. Since then, the-
lottery’s transfers to the state budget have
more than tripled, in inflation-adjusted
dollars.
Ultimately, what
we’ve witnessed over
time is not just
corporate tax
In the mid-1970s, corpora
retrenchment We’ve
tions paid about 18 percent of
seen a corporate tax
a ll income taxes collected by
shift — a shift in the
responsibility of paying the state. Today, the corporate
for the public services share has shrunk to about 7
that create a strong
p e rc e n t,
business climate away
from corporations and
toward those least able
to carry the load.
Oregonians may have an opportunity to
address this situation in November.
Signatures are being collected for a petition
put forward by A Better Oregon that would
raise taxes on large, mainly out-of-state,
corporations. If voters approve it, Initiative
Petition 28 will bring in billions of dollars to
invest in our schools, health care system
and senior services. Hopefully, some of the
revenue will help our state kick its addiction
to gambling revenue.
Initiative Petition 28 promises to be a
game changer. That’s something worth
betting on.
■
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