Detail, east Portland photo, courtesy Miles Hochstein / Portland Ground.

For old times' sake
The bojack bumper sticker -- only $1.50!

To order, click here.

Excellent tunes -- free! And on your browser right now. Just click on Radio Bojack!

E-mail us here.


This page contains a single entry from the blog posted on December 12, 2012 6:45 AM. The previous post in this blog was Loss. The next post in this blog is Like a rolling stone. Many more can be found on the main index page or by looking through the archives.



Law and Taxation
How Appealing
TaxProf Blog
Mauled Again
Tax Appellate Blog
A Taxing Matter
Josh Marquis
Native America, Discovered and Conquered
The Yin Blog
Ernie the Attorney
Above the Law
The Volokh Conspiracy
Going Concern
Bag and Baggage
Wealth Strategies Journal
Jim Hamilton's World of Securities Regulation
World of Work
The Faculty Lounge
Lowering the Bar
OrCon Law

Hap'nin' Guys
Tony Pierce
Parkway Rest Stop
Along the Gradyent
Dwight Jaynes
Bob Borden
Dingleberry Gazette
The Red Electric
Iced Borscht
Jeremy Blachman
Dean's Rhetorical Flourish
Straight White Guy
As Time Goes By
Dave Wagner
Jeff Selis
Alas, a Blog
Scott Hendison
The View Through the Windshield
Appliance Blog
The Bleat

Hap'nin' Gals
My Whim is Law
Lelo in Nopo
Attorney at Large
Linda Kruschke
The Non-Consumer Advocate
10 Steps to Finding Your Happy Place
A Pig of Success
Attorney at Large
Margaret and Helen
Kimberlee Jaynes
Cornelia Seigneur
And Sew It Goes
Mile 73
Rainy Day Thoughts
That Black Girl
Posie Gets Cozy
Cat Eyes
Rhi in Pink
Ragwaters, Bitters, and Blue Ruin
Rose City Journal
Type Like the Wind

Portland and Oregon
Isaac Laquedem
Rantings of a [Censored] Bus Driver
Jeff Mapes
Vintage Portland
The Portlander
South Waterfront
Amanda Fritz
O City Hall Reporters
Guilty Carnivore
Old Town by Larry Norton
The Alaunt
Bend Blogs
Lost Oregon
Cafe Unknown
Tin Zeroes
David's Oregon Picayune
Mark Nelsen's Weather Blog
Travel Oregon Blog
Portland Daily Photo
Portland Building Ads
Portland Food and
Dave Knows Portland
Idaho's Portugal
Alameda Old House History
MLK in Motion

Retired from Blogging
Various Observations...
The Daily E-Mail
Saving James
Portland Freelancer
Furious Nads (b!X)
Izzle Pfaff
The Grich
Kevin Allman
AboutItAll - Oregon
Lost in the Details
Worldwide Pablo
Tales from the Stump
Whitman Boys
Two Pennies
This Stony Planet
1221 SW 4th
I am a Fish
Here Today
What If...?
Superinky Fixations
The Rural Bus Route
Another Blogger
Mikeyman's Computer Treehouse
Portland Housing Blog

Wonderfully Wacky
Dave Barry
Borowitz Report
Stuff White People Like
Worst of the Web

Valuable Time-Wasters
My Gallery of Jacks
Litterbox, On the Prowl
Litterbox, Bag of Bones
Litterbox, Scratch
Ride That Donkey
Singin' Horses
Rally Monkey
Simon Swears
Strong Bad's E-mail

Oregon News
The Oregonian
Portland Tribune
Willamette Week
The Sentinel
Southeast Examiner
Northwest Examiner
Sellwood Bee
Mid-County Memo
Vancouver Voice
Eugene Register-Guard
OPB - Portland
Salem Statesman-Journal
Oregon Capitol News
Portland Business Journal
Daily Journal of Commerce
Oregon Business
Portland Info Net
McMinnville News Register
Lake Oswego Review
The Daily Astorian
Bend Bulletin
Corvallis Gazette-Times
Roseburg News-Review
Medford Mail-Tribune
Ashland Daily Tidings
Newport News-Times
Albany Democrat-Herald
The Eugene Weekly
Portland IndyMedia
The Columbian

The Beatles
Bruce Springsteen
Joni Mitchell
Ella Fitzgerald
Steve Earle
Joe Ely
Stevie Wonder
Lou Rawls

E-mail, Feeds, 'n' Stuff

Wednesday, December 12, 2012

Uncle Phil's tax deal

A reader has sent to us a draft of the bill that Gov. Retread and Nike are planning to hustle through a special session of the lame duck Oregon Legislature in a few days. It's here. As many have guessed, Nike wants to lock in the current single-factor test for apportioning its worldwide income for Oregon tax purposes. That test splits up income among states and countries based on sales, ignoring the amount of property and payroll that a company has in a given place. For Nike, that saves tons in Oregon taxes, because percentage-wise, it has way more property and payroll in Oregon than it has sales. The bill gives the governor the power to bind the state to a contract not to change that rule, as it applies to Nike, for up to 40 years.

Under a contract of that nature, if the legislature later changes the rules for everyone else -- or if a court declares that the rules are different for everyone else -- Nike will get special treatment. The bill provides that there would be nothing future legislatures could do to change the test for Nike.

One interesting note in all this is that there is currently a court case pending that could force the state off the single-factor formula. In that case, which we blogged about here a month ago, a company that doesn't like the single-factor test is claiming that it's illegal. According to that lawsuit, Oregon is required to take multiple factors into account, because it's a member of a multistate compact that requires that all factors be considered. If that legal action succeeds, everyone, including Nike, would apparently be yanked off single-factor apportionment in Oregon. The governor's bill and a contract signed under it would attempt to exempt Nike from the potential adverse outcome of that court case.

Is the bill constitutional? Does the state constitution allow the legislature to delegate its taxing authority to the governor in this way? And does the constitution allow the current legislature to bind future legislatures like this?

And even if it is legal, is this plan good policy? For years we've been hearing from the governor and his party that corporations in Oregon aren't paying their fair share of taxes any more. Individuals, they say, are carrying too much of the weight of the state's taxes. Wasn't that the message of the recent vote to repeal the corporate tax "kicker"? Yet here we are allowing ourselves to be pushed into an unprecedented commitment not to let the political process determine future corporate taxes, for up to 40 years. It's one step forward, two steps back.

Meanwhile, the rushed nature of the deal and the holiday timing are borderline insulting to the public. And now with yesterday's Clackamas mall tragedy, the chances of the average Oregonian hearing a word about this before it's too late are slim and none. It's a strange moment in the state's history, that's for sure. "Will whore for jobs." Doesn't Kitzhaber read the New York Times?

Perhaps the oddest part of the bill is that it purports to ratify any contract entered into after Dec.1 of this year. Why is that highly irregular feature in there? Has Kitz already inked a deal with Nike that he's not showing?

Comments (21)

Over the years, we have repeatedly heard that no CURRENT legislature or congress can bind any FUTURE legislative body to a future commitments.

But a CURRENT governor can?

Clear as day to me. This has nothing to do with creating certainty on a future capital outlay and has everything to do with buying a trump card against multi-factor apportionment for everything they have in OR right now. And for 40 years! What a crock.

Just seeing this kind of brazen attempt to secure preferential treatment over other companies in Oregon makes me think the Healthnet is going to prevail in court. The writing is on the wall.

The Trib is reporting that Nike is shaking down WA Co at the same time.

Life is a series of ups and downs when it comes to having the upper hand. Right now, any business able to provide so many jobs has the uppper hand, and can seemingly write their own ticket. Buisness is in the business of making money, and they're not going to shy away from trying to get the best deal. So, how much do we concede to keep one business here? It may be an extremely bad precedent to set. There are numerous good reasons why we should never pay ransoms or negotiate with hostage takers. It may be tough to do now, but I wouldn't give in. We can hope they stay, but if they don't want to be here let em go. The upper hand will change given time, and you can't take back what you have given away.

Will Vestas be next?
But I am resigned to this one. I have to give Phil's lawyers and lobbyists credit for creativity.

To understand why Retread is concerned, one needs to look at the last fifty years experience in Portland and its inability to retain industry.

It is still not clear to me why this deal has to be done in December rather than Feb. That needs to be properly explained to the public. If it is because of the court case, Kitz needs to say so. That said, bending over for jobs can be a dangerous thing. Anaconda gave Montana lots and lots of jobs, and owned governors and legislators. Is Nike Oregon's Anaconda?

What is to stop a future legislature from getting creative and taxing Nike in other ways?

I'm starting to think the only thing fueling economic activity in Oregon at all is political corruption, the public-private "arrangement".

Grumpy, you nailed it.

Oregon Outback -

Naah, Nike isn't Oregon's Anaconda.

Neither Phil nor his board have the personal integrity nor the civic mindedness that the Anaconda folks had in the period 1880 - 1940.

Ask the folks in Beaverton.

Not sure how this tax bill will work out for the state, but you should be thrilled that Phil Knight has such deep Oregon roots and commitment to keeping his company in Oregon. Keep in mind that almost any state would be more than happy to land a S&P 500 corporation like Nike and it's hundreds of well paying jobs. And I would not be at all surprised to see the company move to another city with far better travel, technology and communication connections within a few years of Mr. Knight's passing.

Current legislatures cannot bind future legislatures, so they could easily reverse this law at some point in the future....

However: the way this bill is structured, it gives the Governor the power to enter into a 40 year CONTRACT that guarantees single-sales-factor calculation for the favored few companies.

Future legislatures could easily take this power from the Governor, but they could not rescind the contract(s) that the Governor agreed to under this statute.

This is horrible policy. Cronyism at its worst. If single-sales-factor is good for Oregon, then it should be similarly guaranteed for every business in Oregon, not just those with political clout.

If Oregon had many Fortune 500 companies like Washington does, Nike wouldn't hold such leverage over us. As it is, this state can't afford to lose Nike. Our state's economy is perpetually fragile - can you imagine what it would be like with no Nike.

Future legislatures could easily take this power from the Governor, but they could not rescind the contract(s) that the Governor agreed to under this statute.

If this were to happen, couldn't the Governor himself be ruled personally responsible for fulfilling the contract and not the state? After all, if someone supposedly representing me commits me to a binding contract through what's proven later to be misrepresentation, they don't get to just walk away, do they?

Stuart: Does the contract say Nike cannot leave Oregon for 40 years? I doubt it. At any time, whether Kitz kisses its butt or not, Nike can move its operations across the river to Vancouver. Any policy change by the Legislature, after being properly vetted, has to apply to all Oregonians and Oregon businesses, not just one or two companies.

40 years?

Geez, these crooks have no restraints to screwing the public.

I guess the Gov' must be planning on upgrading his place in Hawaii.

Does the contract say that Nike has to provide 2,000 new jobs? If the state has to put their promise in a written guarantee, does Nike also?

OO: don't the public employee unions own our governor & legislature? Isn't that exactly why the state needs more money and a lot of it?

Let my uncle Phil have what he wants, the state voted in Dr. Retread. Go along, and by the way build some bunker housing and a extension of the trolley to Tigard.

The equatable,moral and fair thing to do. The gangs need to have options.

The governor and washco are smart to give Nike a deal. Golden Handcuffs are great for the state. The irony is that Kitz needs to get it done now while there are still lots of republicans working in the Salem so that kitz can keep the citizens (democrats) of Washco employed. Go figure.

Ha! Ha! Remember, Mrs. G. sat on the state investment board for a long time, handing out PERS money to this company and that. Some of the deals were questionable.


As a lawyer/blogger, I get
to be a member of:

In Vino Veritas

Lange, Pinot Gris 2015
Kiona, Lemberger 2014
Willamette Valley, Pinot Gris 2015
Aix, Rosé de Provence 2016
Marchigüe, Cabernet 2013
Inazío Irruzola, Getariako Txakolina Rosé 2015
Maso Canali, Pinot Grigio 2015
Campo Viejo, Rioja Reserva 2011
Kirkland, Côtes de Provence Rosé 2016
Cantele, Salice Salentino Reserva 2013
Whispering Angel, Côtes de Provence Rosé 2013
Avissi, Prosecco
Cleto Charli, Lambrusco di Sorbara Secco, Vecchia Modena
Pique Poul, Rosé 2016
Edmunds St. John, Bone-Jolly Rosé 2016
Stoller, Pinot Noir Rosé 2016
Chehalem, Inox Chardonnay 2015
The Four Graces, Pinot Gris 2015
Gascón, Colosal Red 2013
Cardwell Hill, Pinot Gris 2015
L'Ecole No. 41, Merlot 2013
Della Terra, Anonymus
Willamette Valley, Dijon Clone Chardonnay 2013
Wraith, Cabernet, Eidolon Estate 2012
Januik, Red 2015
Tomassi, Valpolicella, Rafaél, 2014
Sharecropper's Pinot Noir 2013
Helix, Pomatia Red Blend 2013
La Espera, Cabernet 2011
Campo Viejo, Rioja Reserva 2011
Villa Antinori, Toscana 2013
Locations, Spanish Red Wine
Locations, Argentinian Red Wine
La Antigua Clásico, Rioja 2011
Shatter, Grenache, Maury 2012
Argyle, Vintage Brut 2011
Abacela, Vintner's Blend #16 Abacela, Fiesta Tempranillo 2014
Benton Hill, Pinot Gris 2015
Primarius, Pinot Gris 2015
Januik, Merlot 2013
Napa Cellars, Cabernet 2013
J. Bookwalter, Protagonist 2012
LAN, Rioja Edicion Limitada 2011
Beaulieu, Cabernet, Rutherford 2009
Denada Cellars, Cabernet, Maipo Valley 2014
Marchigüe, Cabernet, Colchagua Valley 2013
Oberon, Cabernet 2014
Hedges, Red Mountain 2012
Balboa, Rose of Grenache 2015
Ontañón, Rioja Reserva 2015
Three Horse Ranch, Pinot Gris 2014
Archery Summit, Vireton Pinot Gris 2014
Nelms Road, Merlot 2013
Chateau Ste. Michelle, Pinot Gris 2014
Conn Creek, Cabernet, Napa 2012
Conn Creek, Cabernet, Napa 2013
Villa Maria, Sauvignon Blanc 2015
G3, Cabernet 2013
Chateau Smith, Cabernet, Washington State 2014
Abacela, Vintner's Blend #16
Willamette Valley, Rose of Pinot Noir, Whole Clusters 2015
Albero, Bobal Rose 2015
Ca' del Baio Barbaresco Valgrande 2012
Goodfellow, Reserve Pinot Gris, Clover 2014
Lugana, San Benedetto 2014
Wente, Cabernet, Charles Wetmore 2011
La Espera, Cabernet 2011
King Estate, Pinot Gris 2015
Adelsheim, Pinot Gris 2015
Trader Joe's, Pinot Gris, Willamette Valley 2015
La Vite Lucente, Toscana Red 2013
St. Francis, Cabernet, Sonoma 2013
Kendall-Jackson, Pinot Noir, California 2013
Beaulieu, Cabernet, Napa Valley 2013
Erath, Pinot Noir, Estate Selection 2012
Abbot's Table, Columbia Valley 2014
Intrinsic, Cabernet 2014
Oyster Bay, Pinot Noir 2010
Occhipinti, SP68 Bianco 2014
Layer Cake, Shiraz 2013
Desert Wind, Ruah 2011
WillaKenzie, Pinot Gris 2014
Abacela, Fiesta Tempranillo 2013
Des Amis, Rose 2014
Dunham, Trautina 2012
RoxyAnn, Claret 2012
Del Ri, Claret 2012
Stoppa, Emilia, Red 2004
Primarius, Pinot Noir 2013
Domaines Bunan, Bandol Rose 2015
Albero, Bobal Rose 2015
Deer Creek, Pinot Gris 2015
Beaulieu, Rutherford Cabernet 2013
Archery Summit, Vireton Pinot Gris 2014
King Estate, Pinot Gris, Backbone 2014
Oberon, Napa Cabernet 2013
Apaltagua, Envero Carmenere Gran Reserva 2013
Chateau des Arnauds, Cuvee des Capucins 2012
Nine Hats, Red 2013
Benziger, Cabernet, Sonoma 2012
Roxy Ann, Claret 2012
Januik, Merlot 2012
Conundrum, White 2013
St. Francis, Sonoma Cabernet 2012

The Occasional Book

Marc Maron - Waiting for the Punch
Phil Stanford - Rose City Vice
Kenneth R. Feinberg - What is Life Worth?
Kent Haruf - Our Souls at Night
Peter Carey - True History of the Kelly Gang
Suzanne Collins - The Hunger Games
Amy Stewart - Girl Waits With Gun
Philip Roth - The Plot Against America
Norm Macdonald - Based on a True Story
Christopher Buckley - Boomsday
Ryan Holiday - The Obstacle is the Way
Ruth Sepetys - Between Shades of Gray
Richard Adams - Watership Down
Claire Vaye Watkins - Gold Fame Citrus
Markus Zusak - I am the Messenger
Anthony Doerr - All the Light We Cannot See
James Joyce - Dubliners
Cheryl Strayed - Torch
William Golding - Lord of the Flies
Saul Bellow - Mister Sammler's Planet
Phil Stanford - White House Call Girl
John Kaplan & Jon R. Waltz - The Trial of Jack Ruby
Kent Haruf - Eventide
David Halberstam - Summer of '49
Norman Mailer - The Naked and the Dead
Maria Dermoȗt - The Ten Thousand Things
William Faulkner - As I Lay Dying
Markus Zusak - The Book Thief
Christopher Buckley - Thank You for Smoking
William Shakespeare - Othello
Joseph Conrad - Heart of Darkness
Bill Bryson - A Short History of Nearly Everything
Cheryl Strayed - Tiny Beautiful Things
Sara Varon - Bake Sale
Stephen King - 11/22/63
Paul Goldstein - Errors and Omissions
Mark Twain - A Connecticut Yankee in King Arthur's Court
Steve Martin - Born Standing Up: A Comic's Life
Beverly Cleary - A Girl from Yamhill, a Memoir
Kent Haruf - Plainsong
Hope Larson - A Wrinkle in Time, the Graphic Novel
Rudyard Kipling - Kim
Peter Ames Carlin - Bruce
Fran Cannon Slayton - When the Whistle Blows
Neil Young - Waging Heavy Peace
Mark Bego - Aretha Franklin, the Queen of Soul (2012 ed.)
Jenny Lawson - Let's Pretend This Never Happened
J.D. Salinger - Franny and Zooey
Charles Dickens - A Christmas Carol
Timothy Egan - The Big Burn
Deborah Eisenberg - Transactions in a Foreign Currency
Kurt Vonnegut Jr. - Slaughterhouse Five
Kathryn Lance - Pandora's Genes
Cheryl Strayed - Wild
Fyodor Dostoyevsky - The Brothers Karamazov
Jack London - The House of Pride, and Other Tales of Hawaii
Jack Walker - The Extraordinary Rendition of Vincent Dellamaria
Colum McCann - Let the Great World Spin
Niccolò Machiavelli - The Prince
Harper Lee - To Kill a Mockingbird
Emma McLaughlin & Nicola Kraus - The Nanny Diaries
Brian Selznick - The Invention of Hugo Cabret
Sharon Creech - Walk Two Moons
Keith Richards - Life
F. Sionil Jose - Dusk
Natalie Babbitt - Tuck Everlasting
Justin Halpern - S#*t My Dad Says
Mark Herrmann - The Curmudgeon's Guide to Practicing Law
Barry Glassner - The Gospel of Food
Phil Stanford - The Peyton-Allan Files
Jesse Katz - The Opposite Field
Evelyn Waugh - Brideshead Revisited
J.K. Rowling - Harry Potter and the Sorcerer's Stone
David Sedaris - Holidays on Ice
Donald Miller - A Million Miles in a Thousand Years
Mitch Albom - Have a Little Faith
C.S. Lewis - The Magician's Nephew
F. Scott Fitzgerald - The Great Gatsby
William Shakespeare - A Midsummer Night's Dream
Ivan Doig - Bucking the Sun
Penda Diakité - I Lost My Tooth in Africa
Grace Lin - The Year of the Rat
Oscar Hijuelos - Mr. Ives' Christmas
Madeline L'Engle - A Wrinkle in Time
Steven Hart - The Last Three Miles
David Sedaris - Me Talk Pretty One Day
Karen Armstrong - The Spiral Staircase
Charles Larson - The Portland Murders
Adrian Wojnarowski - The Miracle of St. Anthony
William H. Colby - Long Goodbye
Steven D. Stark - Meet the Beatles
Phil Stanford - Portland Confidential
Rick Moody - Garden State
Jonathan Schwartz - All in Good Time
David Sedaris - Dress Your Family in Corduroy and Denim
Anthony Holden - Big Deal
Robert J. Spitzer - The Spirit of Leadership
James McManus - Positively Fifth Street
Jeff Noon - Vurt

Road Work

Miles run year to date: 5
At this date last year: 3
Total run in 2017: 113
In 2016: 155
In 2015: 271
In 2014: 401
In 2013: 257
In 2012: 129
In 2011: 113
In 2010: 125
In 2009: 67
In 2008: 28
In 2007: 113
In 2006: 100
In 2005: 149
In 2004: 204
In 2003: 269

Clicky Web Analytics