Street Roots • Oct. 7-13 „ 2016
Commentary
Page 11
Measure 97 corporate tax would put state on right track
Oregon shortchanges schools, seniors, health care while its business tax burden remains lowest in the nation
BY MARTIN HART-LANDSBERG
C O N T R IB U T IN G C O L U M N IS T
M artin Hart-
Landsberg is a
professor emeritus o f
economics a t Lewis &
Clark College.
regon is failing to provide our
students the quality education they
deserve, our seniors the care they
need, and health care to those still going
without. The main reason is that we tax
corporations less than any other state in
the nation. Measure 97 will go a long way
toward fixing this situation.
Disappearing corporate taxes
Corporations operating in Oregon have
largely stopped paying state income taxes.
Today, corporations pay just 6.7 percent of
all Oregon income taxes. Thirty years ago,
it was 18.5 percent. Corporations pay so
little in Oregon taxes that the state raises
more revenue from the state lottery - a
notoriously regressive tax on the poor.
Absent any significant policy change, the
corporate share of Oregon income taxes is
projected to fall even further, to just 4.6
percent by the mid-2020s.
The Anderson Economic Group
compared the total amount of state and local
taxes businesses actually pay in each state
to their pre-tax business profits. It found
Oregon dead last among the states, and it
has been for the past three years. Oregon
would need to raise an additional $3,5 billion
a year in business taxes just to reach the
national median.
In short, making corporations pay their
fair share of taxes is the only reasonable
way to generate the funds we need to
improve the quality of our schools, health
care, and senior services.
Shortchanging our services
Legislators are currently talking about 7
to 10 percent cuts in the next state budget,
given forecasts of a $1.35 billion budget
deficit. We can’t allow th at
Oregon already has the fourth-worst high
school graduation rates in the country, the
third-largest class sizes, and a school year
that averages a full two weeks less than the
minimum most states require. We face a $1
billion yearly funding gap according to our
Quality Education Model, the state’s guide
to K-12 funding priorities. Closing that gap
will only get us back to where we were
before we implemented Measure 5’s skewed
property tax reform 25 years ago. Right
now, Oregon ranks 40th among the 50
states in per pupil K-12 spending, adjusted
for the cost of living. The 2016 Quality
Counts Oregon Report gives the state a D+
for school finance and a D for K-12
achievement. It doesn’t give out F’s!
We also need to expand public senior
services, as two-thirds of Oregon retirees
have no personal retirement savings. Over
the past 10 years, there has been a 61
percent increase in the number of seniors
living in poverty. We need to invest now in
senior health care services to be ready for
the “silver tsunami” of aging baby boomers.
As for health care: Oregon ranks 31st in
per-capita public health spending, some 20
percent below the median. One in 10
Oregonians still lack medical insurance.
Even those with insurance sometimes go
without the care they need, because
co-payments are more than they can afford.
Measure97
M easure 97 makes ohe simple change in
the existing tax code: It raises Oregon’s
minimum tax on the largest corporations
selling in the state, C corporations with
more than $25 million in Oregon sales, to
$30,001 plus 2.5 percent of the amount of
their sales above $25 million. The Oregon
Legislative Revenue Office reports that this
will affect only 1,051 corporations - roughly
one-quarter of 1 percent of all businesses in
Oregon. The LRO estimates it will raise an
extra $3 billion in revenues per year that
the measure directs to be spent on
education, health care and elder care. More
than half this revenue will come from the
50 largest C corporations operating in the
state.
Who will pay?
Opponents want you to believe that the
relatively few Oregon businesses that
Measure 97 affects will pass the burden of
the tax on to Oregon consumers. If this
were true, they would not be poised to
spend more to defeat Measure 97 than has
ever been spent on a ballot measure in
state history.
It is not true because these corporations
must compete for customers with the 99.75
percent of Oregon
businesses unaffected
by the measure. And
it is also not true
because large
"Corporations pay so little in
corporations like
Oregon taxes that the state
Walmart, Target,
raises more revenue from Iht
Costco, Safeway and
state lottery — a notoriously
Kroger, which owns
regressive tax on the poor."
Fred Meyer, follow
national pricing
strategies; generally
charging the same
price for products in
every state in which they operate, despite
significant differences in state tax rates and
other , costs. They certainly aren’t charging
Oregonians lower prices because of our
super-low corporate taxes now.
Good for the Oregon economy
Measure 97 gives us the best chance in a
generation to turn Oregon around. It will
allow us to significantly strengthen our
schools, senior services and health care. It
will also give us a larger and more stable
tax base. And the combination can be
expected to attract new businesses, leading
to more jobs and a stronger economy.
I strongly recommend a yes vote on
Measure 97.
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