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Thursday, January 28, 2010

Oregon tax increase measures are good news

... for Vancouver.

Comments (24)

What's that you say? Competitive disadvantage? Huh?

I'm genuinely curious to see whether this happens or not. I would love to hear from a business that actually decides to do this.

I wouldn't expect a company to move unless the savings from moving offset the cost of moving.

It would be much cheaper to just lay off a few people to make up the difference.

I wonder if they will... since Washington already has the B&O tax on ALL businesses, not just c-corps. Up to 1.5 percent, as I understand, on some types of businesses.

One essential point the story makes toward the end is that budget cuts also cause out-migration, which happened when Oregon passed Measure 5 in 1990. A decade-long Clark County building boom was the result. One can only wonder how many people would have left Oregon if 66 and 67 had failed. Probably many more than will leave because of these small tax increases, which still leave Oregon a cheaper place overall to do business than Washington.

The Oregonian must be all wet? Their story is just the opposite. But their reporters must be better than the Columbians, even though the Columbian reporters actually talked to a few real people who must be lying.

which still leave Oregon a cheaper place overall to do business than Washington.

Totally depends on the company. High profit margin companies would do much better paying a 1/2 percent of sales in WA than 11% of profits here in OR.

Washington taxes gross receipts but not personal income or capital gains. Now Oregon taxes gross receipts, personal income, and capital gains.

So, where do you want to start that new business of yours? If you've got a choice, it's not going to be here.

Washington taxes gross receipts but not personal income or capital gains. Now Oregon taxes gross receipts, personal income, and capital gains.

How long do you think that will continue to be the case? Washington is facing the same fiscal pressures and has fewer legal obstructions to new taxes than Oregon does. I expect Olympia will take a serious look at both capital gains and a high-end income tax over the next few years, especially after the passage of these two measures. Look, no matter where you go, there's no free lunch. Whatever you save in taxes in low-tax states you will inevitably end up paying in user fees and other added expenses caused by the lack of social infrastructure. At age 51 I've lived long enough to experience the quality of life under relatively high-tax regimes (California, pre-13) and low-tax ones (Oregon, post-5). I KNOW that high is better.

When Boeing was negotiating contracts with the Machinists union in the '90s — before they moved their HQ to Illinois — they had a chart showing how awful the business tax burden in Washington was compared to Oregon.

See this study, Oregon business cannot pay their current accounts payable let alone their new taxes:

So Oregon businesses have the highest 90 day past due accounts in the nation-21%. Seems logical that unions, the legislature and public employees have increased their taxes. Just extend their past dues to 120 days or 180 days, that's fair. If they go out of business, they aren't good business people.

Trutherism has added content to it's definition.

As I understand it, after the passage of Measure 5, we saw a huge economic contraction in Portland all during the 1990s and into 2000s. No population growth, no new housing, no new businesses, no economic expansion. It all went to Clark County. Must be why the Portland metro area is just a ghost town compared to Vancouver today and why Clark County has such a low unemployment rate.

I'm sure the same will happen after M 66/67.

When the Multnomah County "I Tax" or whatever it was called was implemented last decade I was living in Vancouver. When I moved back to Oregon I looked at apartments based on whether or not they were in Multnomah County or not. I eventually picked Lake O. and have not resided in Portland since.

I think others will do the same especially if they have more to gain, or in most cases, more to protect than I did by avoiding the I Tas. People do not like giving up their hard earned money if they do not have to.

Budget cuts in Oregon caused building boom in Clark County? I don't think so. For many years, Clark County had a property tax advantage over Multnomah County. When the Glenn Jackson Bridge opened in Dec of 1982 the boom was on.
(Wikipedia is so fun)

“It will help (Chicago’s) economic development immediately,” Daley told the Sun-Times. “You’d better believe it. We’ll be out in Oregon enticing corporations to relocate to Chicago. I’ll be very frank. I make no bones about that.”

Jebus, if every business owner who has tried the "I don't need to be here, they'd love me in Peoria and Vantucky and Battle Ground and Reno and Chicago" would just STFU and move already we could all be lots happier. Really. Just go.

Having lived in high and low tax states and in cities with city income taxes on top of state and federal and having lived in and paid Washington's B&O tax on gross revenue, all I can say is, if you think your life will be that much better elsewhere, then who are we to keep you from realizing your dreams? Just go already.

Daley is simultaneously jealous and opportunistic. Wondering why Oregon is even on the guy's radar:

Randy Leonard reminds him of his father.

George, I couldn't agree more. Having watched this in action, all I can say is "Give it to 'em 'til it hurts."

25 years ago, my father took a job with Kimberly-Clark as KC was moving its headquarters to Dallas, and he was one of the only employees to move up to the old HQ of Neenah, Wisconsin when everyone else was moving down here. I heard all sorts of interesting stories about executives taking $20k pay cuts just so they could go back to Wisconsin, because Dallas was just too cosmopolitan for them.

Likewise, one of the biggest reasons why the space shuttle program is shutting down is because the geniuses at Boeing decided to move most of its shuttle operations to the Johnson Space Center from the Jet Propulsion Laboratory, and all of the longtime engineers involved with shuttle operations said "You want me to move from Burbank to Houston? Screw you guys; I'm staying right here." and retired en masse. Now that was funny, especially since Boeing couldn't find enough H1(b)s with suitable engineering experience and had to hire these guys back as telecommuting consultants at a significant pay raise.

if oregon is so darn cheap to do business like you liberals claim then explain to me why oregon still has a high double digit unemployment rate then and why fortune 500 companies are not itching to get here fast then?

1) Because taxes are a pretty small component of overall corporate expenditures and are considered along with the services that taxes provide when comparing locations. Unlike wingnuts who apparently think taxes are the only thing, corporations have to be strategic and consider many factors along with taxes (proximity to raw materials, proximity to markets, transport connections, labor force, wage scales, attractiveness for the kind of people you want to attract to work for you, subsidies offered by state and local governments, etc.)

2) Because even where a careful review of all those factors (and more) suggests that a relocation is possibly a good move, it's expensive.

3) And because Fortune 500 companies don't actually relocate all that often to start with.

4) And because it's not worth trying to design your tax system to attract relocating businesses in the first place -- all that happens is you get into a bidding war and the corporations milk the whole thing ... and you wind up with a corporate "citizen" who clearly will leave you in a heartbeat when offered a better deal elsewhere.

5) Also, because Oregon (like many blue states) is a federal tax donor state, getting far less in federal jobs and spending than it pays in to the feds, thanks to our obscenely bloated "defense" structure (not to mention the billions for bombs and bomb cleanup spent each year that is spent by DOE in the nuclear weapons complex). No big bases, a few tiny installations, and not much defense contracting -- that's a river of money that comprises a huge portion of the wealth in states like SC, GA, TX, CA, WA, CA, NV, VA etc.

But hey, if you want to organize a mass relocation of people who think they should move out of Oregon -- a state with very low business tax rates -- to some other state, then please, seize this moment. Don't lose your nerve -- strike now while the iron is hot, go and be sure to slam the door hard behind you so everybody knows how much we'll miss you.

Sorry, second "CA" above intended to be CT (General Dynamics/Groton).


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