Privilege?

"The prospect of taxing some corporations on their gross receipts"

That's my biggest issue with it. If they just wanted to raise the tax rate on earnings, I could live with that.

However, you get a company that sells a lot and is barely staying in business (like grocery stores), shooting one more arrow at it may push it past tipping point.

It's very nice to read a reasoned analysis of this measure. Because my wife is a PPS teacher, the effects of a 'No' vote will be felt in our home--therefore..

Where is Chuck Sheketoff and Dan Petegorsky to dissect your analysis and tell you exactly how wrong you are?

Oh wait! They only debate the merits on turf where they have LT and 4+ other sycophants personally attacking those who substantially disagree with them.

Jimbo,

As I have said on BlueOregon before, you and many others already know, and I will repeat here, the 2009-2010 and future K-12 and Higher Education budgets were created with the assumption that both M66 and M67 will pass.

This is why you have teachers and other public employees shamelessly trotting out "the children" just like agribusiness does with "family farmers" and FarmAid. Just like Republicans do with "the military" when it came time for Bush 2 to ram another $100 billion to trillion plus AFTER the budget was passed for funding the Iraq and Afghanistan Wars.

Like the little 4-H kid trotting his prize pig at the county fair knowing that the pig will be slaughtered and made into bacon less than a month afterwards.

Our "household" will be voting NO! on both.
Too complex, too sneaky and this isn't the right time to be drinking the kool aid made in Salem.

Now we all know Chuck Sheketoff (public employee union central) has and entirely different explanation.
After all he has his job and bosses to consider.

But Jack's is the one the press should be using because it's objective, honest and accurate.

About the "consumers will pay it" thing -- isn't that true of all business taxes? Unless the business can find a way to get customers to cover all its costs (and more), it stops? It's not like the money vaporizes -- all the money M67 raises will be spent immediately and go back into the hands of those businesses paying it -- the state isn't stockpiling any money.

Also, on voting now on the retroactive thing -- is that really the fault of the Leg, or of our weird "Laws take effect Jan 1" rule (which they have to declare an emergency to evade)?

The retroactivity argument strikes me as weak: the law was enacted a year ago, and the protracted uncertainty about its application is the result of actions by its opponents to cause it to be referred to the voters in this election. (Child kills father and mother, then pleads for mercy as an orphan.) Business managers have known for long enough that it could happen to be able to plan for it.

Don't all business expenses, whether they be taxes, transportation or labor get passed on to the consumer?

Should we not tax businesses at all? Seems like most big corporations doing business in Oregon don't pay anything anyway.

Is this also an argument to get rid of Oregon's minimum wage law? Doesn't that just get passed on to the consumer?

I can buy into the argument that it should start in 2010... but the rest seems like a bit of a red herring.

"Should we not tax businesses at all?"

We do - on profits. But taxing a company when they are not making money makes little sense.

In addition, the bigger issue is that the state is not looking at any way to slow down spending. So next biennium, we'll hear the same refrain:

"We need more taxes or we'll close schools."

There would be more money for schools and everything else if we did not have TIF schemes stealing the taxes we already pay.

Oh yeah and soccer stadiums too!

This is when the blog is at its best. Tops!

In the last serious recession (1981-1982), Oregon did raise the marginal income tax rate up a couple of percent for everybody but it was only a temporary increase lasting a couple of years as specified by the legislation. But measures 66 and 67 are permanent and selective. Moreover, the '81 - 82 surcharge was only enacted after state government employment was cut drastically, on the order of some 25% from one person I heard. So, both measures 66 and 67 stink for a multitude reasons, and should receive big NO votes from Oregonians.

Thinking more about regressivity arguments, one of the things I find least convincing about liberals is their insistence that taxes be "progressive" even at the cost of having services slashed instead of raising taxes at the low end.

This comes up all the time when talking about carbon/gas taxes -- "conservatives" oppose all taxes, even at the cost of not having any money to conserve anything, and "liberals" oppose any taxes that hit the poor, even incidentally, much preferring that the poor get hammered by the loss of services.

As someone who has been helping a LOT of very poor people with credit/debt/money problems in the last 18 months, I can tell you that people for whom $75 a year really stings will be hurt far worse by the service cuts that will follow failures of these measures.

Yes, Oregon consumers will pay some of this in pass-throughs -- but, on the other hand, they won't be the only ones paying it -- they will have help from lots of people from other states, who buy computers with Intel chips, or who buy Yakima racks or Columbia Sportswear or Oregon Beef and Tillamook Cheese and who visit etc.

The sad/funny thing is that failure of these measures will not cause Salem to "cut up the credit cards" in the slightest -- bonded debt is still easy to do. Look at the highway package the Leg passed last time, the biggest in Oregon history, with its Dundee Bypass earmark etc. That's not going to be affected in the slightest by failures of M66/67 -- rather, it will be human services programs that will lose not just the Oregon general fund dollars but also, as a result, their federal match dollars, so that every dollar we "save" by cutting an Oregon dollar will cost the programs $2 and sometimes even $3 in total.

I doubt if anything above makes a difference to how anyone votes, but I just hope that people don't kid themselves that they're helping the poor by defeating these measures.

My corporation's domiciled in Delaware mostly because of the Court of Chancery, not taxes. One thing I've noticed is that Oregon's filing fees are so low, they don't even cover the cost of processing the returns. If nothing else, 67 redresses inanities such as that.

$150 is going to break the backs of folks getting free memberships at Multnomah Athletic Club on their shareholder's dime. Take the coin out of your pocket, and tell me whose face is on it.

The argument that taxes raises costs on the consumers goes like this:

1. Business pay local property taxes onto of all the state and local licensing and user fees. (Whether this is a TAX for legal purposes does not matter, theses are monies being paid to a Governmental body, therefore it is a tax).

2. Business employs individuals who pay taxes on their personal income. (Henceforth, business creates a tax base for Government to live off of).

3. Businesss pays a Federal tax on income.

4. Business pays a State tax on income.

5. Taxes are a delayed expense business has to save monies for to pay at the end of the tax year.

6. Increase in state business tax will mean business has to save a little more, henceforth they will mark up their goods a little bit more.

As you can deduce from above, business pays taxes at least 3 times throughout the course of the year, simultaneously employing individuals who constitute the tax base for the Public Sector to live off of.

Each State is different with taxes. I have a few questions for Oregon:

Does the State of Oregon tax small business on gross income?

Approximately how much would a "mom and pop" gift store or convenience mart pay in state licensing and user fees?

Personally, I consider licensing, accredidation and user fees as taxes under a different name. They serve the purpose for "safety," "benchmarking,
and all that, pardon me, bullshit just to justify another source of Governmental income.

The retroactivity argument strikes me as weak: the law was enacted a year ago

Signed by Kulongoski on July 20, 2009 with effective dates of September 28, 2009.

So are we to understand that these taxes apply to sales only within Oregon? Just as the beauty of a sales tax is that part of the tab is picked up by tourists, won't sales of Air Jordans or (heavily discounted) TW hats in the other 49 states be included as taxable revenues?

“Oregon Sales” include sales of tangible personal property delivered to purchasers within Oregon and sales of tangible personal property delivered to purchasers outside of Oregon if the taxpayer is not taxable in the state of the purchaser.

I am likely to vote for 67, and against 66.

There are problems iwth 67, but it's creating a minimum of $150, which doesn't seem too onerous and hasn't been raised since the '30s.

I'm voting against 66 because I think it will actually have a bigger effect on employers and employment than 67.

My main objection to both is that public funding in this state is always in "crisis". I have zero faith that these tax increases will provide some sort of long-term stability. I guarantee that we WILL be hearing about these same "funding gaps" in five to ten years. Heck, maybe three years.

Every picture tells a story. Here's Oregon's version of "economic development."

Go figure.

http://oregoncatalyst.com/index.php/archives/2948-Putting-Oregons-Public-and-Private-Sectors-in-Perspective.html

Measure 67 increases the current $10 corporate minimum tax imposed on C-corporations with Oregon sales as follows:

Minimum Tax
Less than $500,000 $150
$500,000 to $1 million $500
$1 million to $2 million $1,000
$2 million to $3 million $1,500
$3 million to $5 million $2,000
$5 million to $7 million $4,000
$7 million to $10 million $7,500
$10 million to $25 million $15,000
$25 million to $50 million $30,000
$50 million to $75 million $50,000
$75 million to $100 million $75,000
Over $100 million $100,000
(If the taxable income of a C-corporation results in a tax less than the above, a C-corporation will pay the minimum tax, otherwise a C-corporation pays tax based upon their taxable income. In addition, Oregon generally requires corporations to file consolidated tax returns. Each member within a consolidated group is subject to the minimum tax. OAR 150-317.090)

Increases the current $10 corporate minimum tax imposed on S-corporations to $150. (The shareholders on their tax returns pay tax on the S-corporation’s taxable income in addition to the minimum tax.)

Imposes a new “entity tax” of $150 on businesses filing a partnership return. (The partners on their tax returns pay tax on the partnership’s taxable income in addition to the minimum tax.)

Thus, the minimum tax will not be $150 for C-corporations with Oregon sales in excess of $500,000. The minimum tax could be as high as $100,000 or even higher if you count members within a consolidated group.

The Sunday Oregonian has a pro M66/67 article in the Opinion section, from a small business owner. He seemed to get it right, as far as I can tell.

Why should a company like PGE pay $10 in tax (which they have before), instead of $100,000, for example? Or Intel? Have you seen the bonuses issued to select people there, for example?

The vast majority of Oregon businesses have less than a million dollars in receipts. that means the vast majority (somewhere approaching 92%) will pay $500 or less in minimum tax.

How does that "hurt taxpayers"?

I get the argument about enabling the state legislature's poor behavior. But at the same time, people are impacted through no fault of their own. If that's the main argument, then the choice is: Do you punish the latter to teach a lesson to the former?

I'm voting yes. Not because they're perfect, but because I don't want to punish the many for the acts of the few. Afterward, I'll keep pressing to fix the tax system.

Yes, I would agree that the minimum business tax could be increased from $10 dollars to $150. But there is much more to 67 as Jack points out. For those to support 67 because of just wanting to support the $10 to $150 tax increase are making a big mistake of how it will affect many businesses, their employees, thus all Oregon citizens. You don't vote for a measure on one part when so many other parts you disagree with.

For example, a friend of mine with a 40 employee business in the food industry has Oregon gross sales of over $16 Million, meaning he will pay about $16 thousand more in this category of taxes alone under 67. He just barely runs a in-the-black business every year. He gives extensively to charities, to his employees health care, education scholarships, etc. and takes a modest income for himself. His average employee tenure is over 15 years.

To stay in-the-black (he's a good business person) his solution to the $16K tax increase is to lay off two to three employees affecting 6 to 8 dependents.

He is emotionally distraught by this possibility. His employees are like family. He's already cut hours for all his employees as they communally agreed to do to share equally the recession consequences. He's raised his product costs to the max. where he's in jeopardy of losing market share. He's employed all internal cost-saving devices the company can dream up. The $16 thousand dollars is a back breaker.

This same scenario is what will confront many small business-85% of all Oregon businesses-if M67 passes.

ecohuman:

Why don’t you volunteer to pay just $500 dollars extra a year instead of voting for others to pay it. If the state really needs this revenue the tax should be across the board with a temporary income tax surcharge.

How does that "hurt taxpayers"?

In the end, businesses, corporate or otherwise, don't pay taxes. People pay taxes. Usually people as consumers. The cost of doing business, including the business's taxes, is passed on to the consumer in the price. So if you vote yes on 67 you're saying, "tax me more."

...and "liberals" oppose any taxes that hit the poor, even incidentally, much preferring that the poor get hammered by the loss of services.

I've seen plenty of conservative arguments for cutting social programs. I remember "moderates" like Bill Clinton happily swinging the axe to "end welfare as we know it." But I really can't remember ever hearing someone "liberal" advocating that services for the poor should be cut.

Personally, I oppose the addition of regressive taxes -- like a sales tax -- on the poor because I don't think that the amount of services they'll get out of them will be enough to compensate for the money they have to pay. I think anything of the sort would end up as a net loss for low-income citizens and that they'd be essentially paying to subsidize their own social services, with a percentage skimmed off for administration. That would most likely lead to a reduction in the level of services provided.

If the state really needs this revenue the tax should be across the board with a temporary income tax surcharge.

Why?

In the end, businesses, corporate or otherwise, don't pay taxes. People pay taxes.

So, if corporations didn't have to pay any tax at all, their products whould be cheaper?

If you believe that, I've got some products to sell you.

So if you vote yes on 67 you're saying, "tax me more."

Strangely, 17 states have done so--without consumers paying more.

I'm voting yes ... because I don't want to punish the many for the acts of the few.

You mean like applying new minimum taxes to some 30,000+ C-corps and other newly-taxed companies because PGE or Intel or Nike may not have paid what you consider their "fair share" in the past?

Fixing the problem is going to require some pain. Deferring the problem is going to cause more pain down the road, with less incentive to actually fix the problem.

Consider a NO on 67 to be "tough love" for the legislature. It's difficult for everyone, but responsible voters know it needs to be done. It's not a vote against higher taxes, which may in fact be necessary. It's a vote against badly structured taxes.

Never mind that the annual expenditure in corporate tax credits is roughly the same as the amount expected to be raised by 67, IIRC. There are so many far better ways to raise the money, there's really no need to accept this deeply flawed work product from the legislature.

You mean like applying new minimum taxes to some 30,000+ C-corps and other newly-taxed companies because PGE or Intel or Nike may not have paid what you consider their "fair share" in the past?

Yes, I mean applying new minimum taxes. No, not because large Oregon corps don't pay enough.

Fixing the problem is going to require some pain.

(1) What's the problem, and (2)Who's pain? Right now, it sounds like your answer to #2 is "not corporations".

Consider a NO on 67 to be "tough love" for the legislature.

*That* is where everybody's getting it wrong. Voting "No" doesn't force anybody's hand in the Legislature--it just forces cuts. In other words--if you vote No, the cuts get made, and we're right where we were. *Period*.

There are so many far better ways to raise the money, there's really no need to accept this deeply flawed work product from the legislature.

I'm sure there are, but (a)these are the measures are on the table, and (b)the cuts resulting from a No vote are real, severe, and will affect *everyone*.

Maybe the legislature could start by cutting back on the state's own payroll and benefits for a while... especially the obscenity known as PERS.

Maybe the legislature could start by cutting back on the state's own payroll and benefits for a while.

I agree, except I think PERS can't be lumped into one big bad thing. The PERS that schoolteachers get, for example, is not the same quality and quantity that many state professionals get. I've seen this firsthand; my wife's PERS, after over 10 years, is basically almost worthless.

Jack's post was the most well-reasoned argument in opposition to Measure 67 that I've read, but it didn't move me to switch sides. There is one big false assumption in his argument: businesses will inevitably pass on the cost of these taxes to their customers.

If a business is charging the most the market will bear (and why wouldn't it?), then it will be difficult to raise prices. More likely, the business will cut expenses--supplies, labor, rent, whatever. And it that's impossible to do, the owners will take less out of the company in compensation and benefits.

The overwhelming majority of businesses in Oregon are not C corporations and the tax increase they will pay will be so minimal as to be hardly noticed. The heavier tax burden is going to fall on companies like Nike, PGE and Intel. And even if it runs into several hundred thousand dollars, they can afford it.

By the way, I own PGE stock and get a nice dividend every quarter, which I assume is coming out of profits. And yet PGE has been paying the $10 minimum, probably because of offsetting tax credits or loss carry forward.

Ecohuman:

You didn't answer my question. Would you support an across the board income tax surcharge instead of 66 & 67? By the way, I see you really have a slanted interest as a member of your family is a public employee. I have state employees in my family and they see the waste going on in state government first hand. Funny they are voting NO.

You can oppose 66 and 67 on the basis of the standard opposition to taxes of any kind. About 40 percent of voters will reliably do so. That kind of voter doesn't deserve to be called a citizen.

Or you can oppose the measures on the basis of some supposedly more enlightened view of what's good for the state as whole. Either: "It'll hurt businesses and they'll lay off employees" or "Businesses will just pass on the cost to consumers." Simply choose which one of these standard, simplistic, disingenuous, mutually exclusive arguments you want to make.

Or you can support the measures because, basically, they raise money from people and entities who can afford to contribute more during a time when many have been plunged into poverty and much of the middle class is imperiled. And that money will go, basically, to employ people who make this a more humane, more civilized place for all of us to live in. We need teachers, public health workers, a criminal justice system.

I'll take the humanitarian and civically responsible view and vote "yes" on the two measures.

Gil Johnson:

I own a business and this economy has almost wiped me out. I had to lay off two employees and cut every expense I could. I even fired the rag service and take home the rags and have my wife run them through the wash to save money. Believe it or not I haven’t taken a salary or any kind of payment for over a year, and yes that extra $140 will hurt. It will come out of my personal savings. Don’t anyone of you smug government employees tell me I am a crummy business man and I should go out of business either. I still have a few employees that depend upon me and I still pay their withholding taxes and health care too. I also pay up the wazoo in city fees and surcharges. Don’t tell me I don’t pay enough. I am sick of you phony progressives that love to tax anyone but yourselves.

Maybe the State or Oregon is just too generous with tax credits. Perhaps it would be wise for the legislature to limit tax credits that C-corporations can take to 50% of their tax going forward. Corporations that earned or bought BETC and/or other tax credits with the expectation they would get to use them to offset future tax liabilities should still get to use them under the old rules.

While I have no way of knowing, but I suspect some of the corporations paying the $10 minimum tax are doing so because they are using tax credits to eliminate their income tax. Of course S-corps were required to pay the minimum tax of $10 even if they had taxable income passed on to their shareholders.

What I've been having trouble with lately isn't so much the measures being passed (which of course have been given a lot of thought on my end), but the seeming lack of transparency and honesty I have been seeing in policy making nowadays.

The state needs to lay off/fire 20% of it's workforce tomorrow, start with cutting 50% of all "management" first. Then make all the union employees (and management) pay atleast 25% of thier health care premiums and end PERS and start more of a 401K process for retirement. The public employee unions are bankrupting the state...they are soooo greedy!

And I'm sick, John Benton, of you phony businessman getting all self-righteous and acting like you're running a charity operation by, in reality, running a business designed to profit you. If you're not making a go of it, look in the mirror to figure out who's responsible. Don't blame government and taxes. If you stopped to think about it a minute, you'd realize that your business would be impossible without the infrastructure and legal and civic structure provided by government.

BREAKING: Secretary Of State Finds $3.3 Billion In Funds

Oregon’s Comprehensive Annual Financial Report (CAFR) released by the Secretary of State’s office last week states that more than $3.3 billion in “unreserved, undesignated fund balance… was available for spending[1].” A budget plan pushed by Senate Republicans calls for $133 million from those balances to help finance this cycle’s budget in a way that protects the economy and preserves important services.

“We can protect important government services and Oregon’s economy by using the money already at the state’s disposal,” said Senator Chris Telfer (R-Bend). “This report confirms that there are billions of dollars for use at the legislature’s discretion. We should use a small portion of this money to protect K-12 classrooms, higher education, services for the disabled and public safety.”

The CAFR, prepared by the State Controller’s Division at the Department of Administrative Services to analyze the position of the Oregon’s fiscal affairs, states:

“As of June 30, 2009, the State’s governmental funds reported combined ending fund balances of $4.4 billion. Of this amount, approximately 25.1 percent was reserved for nonspendable items, such as inventories and permanent fund principal, or for specific purposes, such as debt service. The remainder was classified as unreserved, undesignated fund balance and was available for spending, subject to statutory and constitutional spending constraints.”[1]

Since by definition lawmakers write statute, any statutory constraints can be addressed.

“This is money that has piled up in agencies from over-collected fees and it is revenue that has not been expended as scheduled,” said Senate Republican Leader Ted Ferrioli (R-John Day). “These are taxpayer dollars that should never be left stranded in the bureaucracy, but shifted to pay for services Oregonians need. If we use this money wisely, we can leave the economy to grow and recover.”

Senate Republicans have announced a budget proposal for the February session, saying that there are ways to balance the budget without increasing unemployment or drastically cutting services in the midst of a historic recession.

Richard:

You are correct. I am running a charity now as I am now a non profit. My biggest beneficiaries are the city, county and state. I also still give a decent percentage to the Dougy Center, Our House and the Portland Ballet. Oh by the way tell me, since when has making a profit been a sin. If it wasn’t for the thousands of little businesses like mine this state wouldn’t have any revenue. You most likely are an unsuccessful type that doesn’t have a pot to piss in and want me to cover you tab.

I've seen this firsthand; my wife's PERS, after over 10 years, is basically almost worthless.

Amen

You didn't answer my question. Would you support an across the board income tax surcharge instead of 66 & 67?

You didn't ask that question, but I'll answer it--no.

By the way, I see you really have a slanted interest as a member of your family is a public employee.

Absolutely.

I have state employees in my family and they see the waste going on in state government first hand. Funny they are voting NO.

And I safely assure you that thousands of school employees--will be voting YES. Including, for example, custodial staff and bus drivers.

Tell me, John--how do you feel about the custodial staff of schools that are "public employees"? Because *they belong to a public employee union too*. Are they draining the coffers dry? No? You sure? How about school bus drivers? They have a union too. Are they responsible for the fiscal mess? No? How about teachers? That's different, right? Because...they're rich, right? Right?

Right.

The incidence of business taxes falls on consumers and employees -- not on shareholders, and most definitely not on fat-cat CEO types. If you vote for M67, you're taxing the little old lady buying a loaf of bread, more so than the big bad credit card companies.

how do you feel about the custodial staff of schools that
are "public employees"? Because *they belong to a public employee union
too*.

I thought Portland laid off all the school janitors and hired cleaning companies. Or do I remember them being forced to hire them back?

Also, eco, you need to calm down.

Or you can support the measures because, basically, they raise money from people and entities who can afford to contribute more during a time when many have been plunged into poverty and much of the middle class is imperiled. And that money will go, basically, to employ people who make this a more humane, more civilized place for all of us to live in. We need teachers, public health workers, a criminal justice system.

I'll take the humanitarian and civically responsible view and vote "yes" on the two measures.

Richard, I'm sure you're well intentioned and all, but it is thinking like this that fosters government inefficiency and keeps sleazballs like Adams in office. That whole "basket of puppies" argument is getting pretty tired...all the while government employees and PERS recipients add little or no value to our society and suck the lifeblood out of the John Benton's out there who are just trying to keep people employed.

You're pretty lucky you can blog from the desk at your government job while "taking the humanitarian and civically responsible view"....

Or do I remember them being forced to hire them back?
It seems to me something like that happened.

The reality of the small business owner today:

One owner I know, after making payroll, had to borrow $40 for gas money so he could continue coming into work.

Another owner, due to a single late customer payment, had to borrow $100 to feed her family for the week.

It sucks out there for EVERYONE. This notion that business owner can easily cough up $140 is utter b.s.

As I understand it, the measures only affects a small fraction of businesses.

If you're a sole proprietorship--which the majority of Oregon small businesses are--you're totally unaffected. You have no corporate minimum tax.

If you're a partnership, LLC or S corp, your new minimum tax is $150.

If you're a C corp, and have no taxable income (few do), your new minimum tax is $150.

If you're a C corp with taxable income, you pay a graduated amount.

Based on State of Oregon figures I've read, that means that the majority of small business (as much as 90% of them) face no change in taxes, and at worst, an extra $140 yearly.

PD:

I don't have a government job, and I'm not a PERS recipient.

I just see most state government jobs as being extremely valuable and in many cases essential. Teachers, state cops, parole officers, judges, children's services workers, public defenders, parks employees, public health workers--the list goes on and on. I think we need those people in order to have a decent society, and I'm willing to pay for them through taxes and feel others should as well. It's basic civics.

I find your belief that "government employees and PERS recipients add little or no value to our society and suck the lifeblood out of the John Benton's out there" to be ridiculous. It's so ridiculous, that I'm almost not inclined to take it seriously enough to call it immoral, which it would be if you meant what you said. I'll just assume you're feeling silly and excited.

I agree of course that we need businesses, but I don't think the passage of measure 67 would do much harm to many of them, and I think it would do a lot of good for must of us.

I don't look at the John Bentons of the world--meaning any old guy who owns a business--as villians, but nor do I think they're automatically heroes just because they call themselves "small business owners" and employ people. Some employers are good and generous; some are greedy and exploitive. I don't know where John Benton falls on the continuum; I just know that he sounds like the typical knee-jerk anti-tax, anti-government complainer.

My view is not only well intentioned--thank you, PD--it's also a lot more comprehensive than yours. I realize that I live in a modern, highly complex state and nation in which people live with a great degree of interdependence. The complexity and interdependence of modern life in a mass society require that we pay for important government services with tax revenues. Right now, we're not raising enough revenue.

"If you're a C corp, and have no taxable income (few do), your new minimum tax is $150."

Not true.

If you're a C-corp with over $500,000 in Oregon sales your minimum tax is more than $150. You could still have no taxable income with $500,000 or more in Oregon sales. Your minimum tax could be over $100,000 depending upon the circumstances.

ecohuman

Those public employee janitors were earning over $40.00 per hour with benefits which was about three times the going rate for janitors. PPS rightfully fired them and hired a non profit that offered janitorial services and saved the district four million a year. Unfortunately some uber liberal judges ordered that to be reversed on some technicality. Don't worry though it will come back next time the contract is up.

If you're a C-corp with over $500,000 in Oregon sales

Everything I'm reading points to taxable income, not "sales". Can you point me to a source where I can read about a direct tax on receipts?

This may be the first tax increase I will vote against. My kids have been in the public education system now for 12 years and I am fed up with the City, County,and State every couple of years holding a gun to my kids head and saying pay up or the kids get it. I was also at the public "imput" meeting at Franklin High School last month with the School Superintendent and being told how they need to close three high schools to bring about equity and repair a broken system. I don't trust any of them anymore.

Richard:

I will ask you the same question as I asked ecohuman. Would you instead of 66 & 67 support an income tax surcharge to apply equally to all Oregon tax payers as to their tax bracket. Or would that be immoral?

John, is your company a C-corp?

John Benton:

No, I wouldn't support an income tax surcharge along the lines of what you described--because the Oregon tax rates are too regressive as it is.

I would support a surcharge that hit everyone at middle income or above (which would include me, by the way). But I think a tax increase that's tailored to raise money from the very wealthy or the traditionally undertaxed--66 and 67 fit this description--is preferable to even a middle-class and above surcharge.

You don't have to believe me, but I've voted for many tax increases that affected me. And I don't think most of us in Oregon are overtaxed. I think we get a lot of benefit from our state taxes--even though there is, as in any human enterprise, some waste and ineffiency. I like to point out that the state doesn't have a defense department, the biggest cause of wasted money at the federal level.

ecohuman:

No, my company is an S-Corp. I will have to pay an additional $140 per year. Understand this: All the income of my company is taxed at my personal tax rate. Last year the total taxes I paid, including my company withholding, Tri Met, Multnomah County personal property tax (yes I pay property tax on all my business desks, shelving, phone systems, computers, production equipment and misc. supplies at the same rate as you pay property tax) Unemployment tax, workmen’s compensation, city business license and fees for displaying signage, totaled $104,000 and change. I did get an income tax refund of $299 from the state because of my business losses. I still paid $8800 in state income taxes. Remember I didn’t make a dime on my business. I had income because I sold some assets and paid capitol gains to loan my business some cash to pay creditors. You arrogant know nothings are despicable, and you tell me proudly that you don’t want to pay any part of the state’s deficit, why? Are you to good to do that?

You arrogant know nothings are despicable, and you tell me proudly that you don’t want to pay any part of the state’s deficit, why? Are you to good to do that?

Okay. I ran a S corp here for about 8 years. I paid a ton of taxes, both state and federal, and also tri-met and the City's obscene business tax.

As for the state's deficit, I already do help pay it. Every taxpayer does. I don't like how Oregon's legislature functions, but that's a bigger problem preceded by a more urgent potential disaster. So, I'm focused on the more urgent problem.

If the measures fail (which they might), and the promised cuts occur, you and I will still pay--through unemployment, public assistance, and other indirect costs.

So, given all that, I'm not sure how I can simply say "it's the state legislature's fault, let them deal with it". They haven't, and for now it's our problem, I think.

ecohuman:

[If you're a C-corp with over $500,000 in Oregon sales...

Everything I'm reading points to taxable income, not "sales". Can you point me to a source where I can read about a direct tax on receipts?]

I guess the best place to read about the minimum tax on C-corps is Measure 67.

Measure 67 increases the current $10 corporate minimum tax imposed on C-corporations as follows:

If Oregon Sales are
Less than $500,000 $150
$500,000 to $1 million $500
$1 million to $2 million $1,000
$2 million to $3 million $1,500
$3 million to $5 million $2,000
$5 million to $7 million $4,000
$7 million to $10 million $7,500
$10 million to $25 million $15,000
$25 million to $50 million $30,000
$50 million to $75 million $50,000
$75 million to $100 million $75,000
Over $100 million $100,000

If the taxable income of a C-corporation results in a tax less than the above, a C-corporation will pay the minimum tax, otherwise a C-corporation pays tax based upon their taxable income. In addition, Oregon generally requires corporations to file consolidated tax returns. Each member within a consolidated group is subject to the minimum tax. OAR 150-317.090

Richard. I agree that there are necessities that are provided by hard-working government employees. Police, fire, teachers...sure. But employees of the various taxing and lisencing agencies that John Benton has to answer to...a total waste of tax dollars during and after their tenure on the dole.

I, like many, grow even more outraged because this growing government cancer is dragging down the essential services we do need by forcing things on us we don't. Think bike lanes, trolleys, and bodyguards for Sam Adams here Richard.

But is sure sounds nice if we package it in 'humanitarianism', right?

The bulk of government is wasteful and inefficient. Go ahead and condecend the John Benton's of the world, but these business owners wake up every day taking risks and signing on the line in ways completely unimaginable by government employees and bureaucrats that decide their fate. My guess is that you've never taken these sort of risks or you'd understand the argument. That's pretty clear.

ecohuman:

Did you miss speak or are you fabricating? You don't run and S-Corp, you own it; otherwise you are an employee. You can pay yourself a salary and pay income tax but you still get taxed at your personal rate if the corporation makes money.

You don't run and S-Corp, you own it; otherwise you are an employee. You can pay yourself a salary and pay income tax but you still get taxed at your personal rate if the corporation makes money.

I ran an S corp (you pick whatever verb works for you) and understand how they're taxed, having learned it the hard way.

John, I give up. You're looking for straw men, over and over. I can't help you anymore. I've been commenting about the measure--you're spending time ridiculing the commenters.

"Have you seen the bonuses issued to select people there"

Um, you do realize they pay personal income taxes on those bonuses anyways?

"but that's a bigger problem"

That will get shelved another two years if this passes.

"The bulk of government is wasteful and inefficient."

No, PD, the bulk of state government is "police, fire, teachers," things you said you're in favor of. You're kidding yourself, apparently in order to give yourself an excuse to engage in a tiresome rant against taxes and government, if you think that "bike lanes, trolleys, and bodyguards for Sam Adams" represent major expenditures in the overall state budget scheme.

"represent major expenditures in the overall state budget scheme."

No, but benefits that are very generous and that are unsustainable are a big part of it that no one wants to address.

I would love to see the number of pub employees pre resident to see if we've ever had any efficiency improvement.

It's just when I read that there are more fed employees at >$100K than there are at

Jerry | January 11, 2010 1:03 PM

"...To stay in-the-black (he's a good business person) his solution to the $16K tax increase is to lay off two to three employees affecting 6 to 8 dependents...."

Three employees total annual burden is $16k?

I thought slavery was illegal in the Orygun Territories?

John Benton--I make my living solely from the small business I run, and it also is not much of a living. When I started it 17 years ago, I had to work a second job for almost three years. For awhile, I actually lived in my office inside my business. It has grown over the years and I am more stable. But if the economy gets worse, I could easily be wiped out.

When the private sector is down, the government needs to step in and keep the economy going (basic Keynes). Without Obama's stimulus plan, we'd be in the midst of another Great Depression. The feds, which can run a deficit, should be embarking on a second round of stimulus spending, primarily aimed at propping up states, which can't run a deficit. But this isn't likely to happen, so the states need to raise revenue any way they can. The ballot measures increase taxes on the people who can most afford to make an extra sacrifice.

increase taxes on the people who can most afford to make an extra
sacrifice.

66 does this, but 67 certainly doesn't.

Oregon businesses in recent years have benefitted significantly from a shift in the over all tax burden from business to individuals. This is especially true for property taxes. You can certainly argue that business tax burdens fall indirectly on individuals, but we had thriving businesses in the years before their expenses were reduced in this way. With measure 67, our business tax rates will not be high relative to those of other states and our local businesses will not suffer any competitive disadvantage from it.

Old Zeb, being old, you've been around and must know something about business. For the owner to make up the $16K loss in taxes, he must lay off possibly two to three employees-it isn't a straight one to one ratio. Some other employees must fill the tasks of the laid-off employees (additional costs), and other costs attributed to this. There's many factors to compensate for the $16K tax bill.

But then you may not know. It seems like many posters here don't really know too much about the business end.

In the end, many Oregonians who vote against this will be expressing their frustration. Frustration at the legislature, the bureaucrats who let 15 year old abuse victims get slaughtered by their parents, the police who crush schizophrenics in their control rampages, mayors who fondle young people in city hall bathrooms, state police chiefs who chase around after drunken subordinates and masturbate at the sight of their drunken passed-out bodies, coaches who drive drunk, etc etc etc

After recently looking in to the eyes of an abused child I asked myself..can we trust the government with ensuring ANY safety for this child?

And sadly, increasingly, there seems to be ever less certainty about this question and others like it. It seems the more we spend, the dumber the system and the people in it get. Just makes me want to holler sometimes.

I never got a job from a poor man.

The "Cut the Taxes" (on the wealthy) mantra over the last many years has come home to roost in Oregon, States and Nationwide.
A visual example: Past funding cuts included walking away from care of the severely mentally ill, with devastating results for communities and families, likely exacting an ongoing much higher cost in other ways to society in the end. Have you endured the many mentally ill surviving on the streets and not to mention in jails these days. The State Hospital was forced to drastically cut it's census and deny admission to most very sick new patients. Many were dumped in downtown Portland flop houses and other just as inappropriate places by the State Hospital starting in the 1980's when mental care funding was cut by slow death over several legislature's "cut the taxes" schemes.
How many families since are denied reaching their own potential, hence contribution to society, because of the terrible drain trying to cope with caring for members that really require professional care in a professional facility. And how many patients are denied their own potential and contribution to society because of lack of appropriate treatment?
As a society, we are paying more in the long run in many ways than the cost of providing the professional setting.
The Tax Cutting strategy over many years began from the bottom up, those least able to defend themselves, until now, the middle class and necessary services for a society to thrive are losing, which if continued heads us to a two class society with the bottom 95plus percent surviving by their wits as is the case in many foreign countries.

The new phenomena of very elite rich CEO's and Companies have come to own our lawmakers, thus the laws to enhance their wealth at the expense of society.
A gross example is Goldman Sachs got Congress to insert in a bill that it pays only a 1% tax on earnings. And what does it's CEO get paid? Millions! Maybe if Goldman and others paid their tax share the CEO's wouldn't be diverting off obscene pay to themselves. And for what? A contest to see who ends up with all the chips?
The rest of us aren't wealthy enough to manipulate breaks like that.

Note: The State Police officers were cut some 75 percent over several legislatures, that as Oregon population and crime grew. Go figure why anyone would justify that. Then it is blame the Government when victimized by a criminal.

Anyone know the old ratio to current of the shift of the Oregon tax burden from the business and high end earners to the middle class? I recall it as very substantial.

What do we do to stop this train from wrecking our golden civilization?

from where i sit....

california, bless its soul, has a zillion voters-pissed-off-at-how-the-government-is-doing-business ballot measures this season..one of them requires any lawmaker to abstain from voting on any measure that will directly financially benefit any of said lawmakers financial contributors.

NOW we might get somewhere...

and have you ever wondered if the cuts that were made unfairly bolstered the security, financially and otherwise, of those people who were not cut?

You rail at the managerial class, and yet, that class is very healthy in the public sector. Just look at the CRAZY salaries we pay public school administrators, and maybe you will understand why some of us are frustrated at paying any more in to the public trough.

Anyone know the old ratio to current of the shift of the Oregon tax burden from the business and high end earners to the middle class?

As far as businesses are concerned, it would only be relevant if the ratio of c-corps filers to individual filers had stayed the same, which is hasn't.

The # of c-corps filing is down 3% and individuals are up 33% in the last 20 years. The # of s-corps, which pay taxes as individuals, is up 200%.

To suggest that c-corps should be maintaining a certain % of taxes paid makes no sense when the individual side has grown so significantly.

As far as businesses are concerned, it would only be relevant if the ratio of c-corps filers to individual filers had stayed the same, which is hasn't.

I'm no statistician, and math was not my best subject in school, so I apologize if this is a dumb question. It seems to me that the actual number of entities - whether it be individuals, C- or S-Corps - is irrelevant. Their incomes aren't though. That's what we base taxes on, not the number of entities there are. I'm not explaining this well.

For example, say there were 20 C-corps making widgets 20 years ago. All the companies combined made $1 million selling their widgets. Over the past two decades, those 20 companies consolidated, bought each other out, whatever, until there are only 10 C-corps today making widgets and sharing that same $1 million market. It doesn't make sense that those 10 entities should contribute 50% less to the tax base, just because there are only half of them left doing business. Am I wrong? Now if those 10 were only selling half as many widgets now as were sold 20 years ago by the 20 widget mfgs, I could understand it. But that's not necessarily (or even usually?) the case, is it?

I'm sorry, but the claim that a business cannot afford even $140 more per year in taxes strikes me as over the top. If less than $12 per month is gonna break you, I have to think your business isn't going to make it anyway. I really don't know how you can argue that that part of the law is unfair. It hasn't been raised in 80 years! My 16-year-old paid 20 times the then current corporate minimum in state income tax last year. Is THAT fair? "Fair" is obviously in the eye of the beholder.

As far as the gross receipts tax... other states do it, is business suffering there? I know each state's taxing schemes are different and you can't compare one to another directly, but at some point these states implemented their gross receipts tax and it would be instructive to know how business fared in their state after it's implementation.

I agree that it really sucks to get stuck with a new or increased expense for which you didn't have time to plan very well. I got hit when I had to reregister my car late last year. We all got hit a couple of years ago when gas prices went through the roof. THAT cost me a hell of a lot more than $12 per month, and I, as a lowly bartender, somehow managed it.

Government waste drives me crazy and Jack's posts on it are what bring me here nearly every day. But as a former employee of 3M, I can testify that waste and inefficiency are not limited to the public sector. I think it's rather inherent in most really large organizations. If you're going to rail against government - and please do! - you should also take the large corporations to task as well. Your tax dollars are being used to pay for the public services they use - which cost way more than $10 per year - just like your tax dollars go to pay teachers and firemen.

A few things pop out on this thread:

- Oregon does not tax wealth, it taxes income. Measure 66 will only extract more tax revenue from income. The truly wealthy have the ability to limit their actual income.

- having high earnings does not make one wealthy, but easily provides a revenue stream to tax.

- if one is considered wealthy due to their "vast" holdings of various assets, the only way Oregon gets a piece of this wealth is via taxes on real property, or when assets are converted to cash - i.e. capital gains. Oregon gets no tax revenue from investors who hold tax-free bonds or other tax protected assets.

- business use their profits for many things: investing in new buildings and equipment to grow their business, to pay dividends to their owners, and to pay back debt. When a business simply retains earnings, and does nothing with them, they just sit there doing nothing for the business or the economy. Remember, it takes money to make money. When a company pays out dividends to owners and shareholders, those payouts are taxed as personal or dividend income, at a rate typically higher than what the corporate tax rate is. When bonuses are paid to employees, managers, and officers and CEOs, those are earnings, and they are taxed, again at a rate typically higher than the corporate tax rate. Measure 67 is simply an effort to tax retained earnings.

Many people here are commenting on what businesses and the wealthy should or should not do; most comments are from those who are neither successful businessmen nor wealthy.

The state simply cannot continue to spend faster than its ability to tax. There is a limit to how many times the state can increase the tax rate.

@Bartender

This is going to be nearly impossible to explain like this, but I will try to explain my logic.

In 2001, there were 46 individual filers for every C corp filer. In 2007 there were now 58 individuals for every corp. That is a 26% increase in the number of individual filers over 7 years. Just imagine if both groups had no increase in income over those years. Given that there are now 26% more individuals, it would stand to reason that the amount of money they paid in taxes to the state as a percent of the total amt paid would have gone up and the reverse would have been true for the corp's.

Now, according to ODOR, the taxable income of individuals went up 48% during that period, while c-corps went up 23%, quite good considering there were 10% fewer of them. So if you look at raw dollar amounts, it would stand to reason that individuals, whose incomes increased at a factor 2x that of corps, would pay a greater percentage of the total tax take to the state.

...but the claim that a business cannot afford even $140 more per year...My 16-year-old paid 20 times the then current corporate minimum in state income tax last year. Is THAT fair?

The first part of your statement depends on your experiences with various businesses. During normal times, I would say that the average established business could afford it w/o any problem. These are, however, not normal times. I know of one long time business owner, who after making payroll, had to borrow money for gas so he could make it in to work. Another who, as a result of a customer bouncing a check, had to borrow $100 to feed her family for the week. Just because a business is surviving, doesn't mean they aren't counting EVERY penny.

I guess the reason that your daughter paid taxes is that she had taxable income. A business that pays the minimum does so because they had NO taxable income for the year. In fact, according to ODOR, 2 of every 3 corps that paid the minimum had NO taxable income.

I am several months into my latest business startup. I lost around $8000 for 2009. Should I have to pay $150 in income taxes? When I started my first business in 1993, I did so with only $300. If I would have been subjected to a $150 tax bill at the end of my first year, I would have either had to borrow the money or go out of business. Hardly fair.

I hope my ramblings made some sense.