House Republicans call for tax cuts

By Oregon House GOP Office:
HOUSE REPUBLICANS CALL FOR SUSTAINABLE, PRIORITIZED SPENDING;ECONOMIC STIMULUS, RELIEF FOR WORKING FAMILIES

SALEM”” In light of a $762 million revenue shortfall for the 2009-11 biennium, House Republicans today called for sustainable and prioritized spending in the next budget. The caucus also called for tax reforms to promote capital investment and to provide tax relief for lower-income Oregonians and working families.

“Spending in 2007 was unsustainable, and now the Legislature is facing difficult decisions in 2009,” said House Republican Leader Bruce Hanna (R-Roseburg). “It is time to bring government spending back under control, and to pass measures to keep dollars flowing through our economy and to keep capital within our state.”

Rep. Vicki Berger (R-Salem), Vice-Chair of the House Revenue Committee, said the Legislature can’t continue to increase spending and taxpayer-obligated debt. She said Legislature must pass tax reforms to help working families and lower-income Oregonians, and prioritize spending to protect schools, public safety and health care for vulnerable Oregonians.

“The state can’t afford to dig a larger fiscal hole,” Rep. Berger said. “It is time to focus on sustaining the programs and services most important to Oregonians, and passing pro-growth and pro-family tax reforms that would put more dollars back into our economy.”

Earlier this year, House Republicans announced legislation to double the state’s child tax credit and make Oregon’s income tax fairer for lower-income workers. The caucus will also introduce legislation to reform Oregon’s capital gains tax rates, among the highest in the nation, to promote capital investments in businesses and workers.

“Rather than finding new ways to extract more money from Oregonians, we will work to put more money back into their pockets and back into the economy,” Rep. Hanna said. “The Legislature must create a better environment for businesses that helps them succeed and create jobs.”

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  • Rupert in Springfield

    2009 Legislative wrap up:

    In a compromise measure, Democrats and Republicans settled on a tax plan. Neither side got all they want, but the Democratic leadership announced they were proud that a combination of revenue raising measures for investment could be implemented to offset potentially devastating consequences of the tax cuts Republicans insisted on. Among the measures passed:

    A tax increase on cigarettes and all alcoholic beverages with the exception of wine to pay for children’s health care programs.

    A news gas tax, “The Green Dime” nicknamed for the ten cent a gallon investment measure, for adding bike lanes to all roads. In addition, 10% of existing gas taxes would be switched from maintenance of automobile aspects of existing roads to investments and enhancements of bike lane aspects of roads. This is the so called “Highway to Hell” provision, jocularly named for where proponents wish people who drive conventional automobiles would go.

    A bi annual car tax that will be used to fund research into alternative fuels, a portion will be set aside to implement a program to phase in vehicle inspections across the state with fees charged for the service thus providing more revenue. 10% of the revenue stream from this tax is to be dedicated to investments in benches, rest areas and general enhancments to bike lanes in extremely rural and remote areas to encourage ridership.

    State licensing of all wood stoves. It is hoped that by slowly increasing the fees people will abandon the stoves as their primary source of heat. Democrats lauded this measure as smoke from wood stoves is estimated to lead to the death of approximately one hundred thousand children annually in the state.

    A general business tax in which all businesses would be treated essentially as type C corporations, with their profits taxed once at the corporate level and then once again at the wage level. Currently the majority of corporations in Oregon only pay the minimum tax because profits are taxed at the wage level. This has resulted in what some see as unfair, since profits are taxed only once. Democrats lauded this provision as greatly simplifying the tax code by treating all businesses the same, thus leading to a more simplified system. “This will be a job magnet for Oregon, now some might say we are taxing small business twice, we say we are simplifying the code, and that’s something all Oregonians can be proud of”

    Part of the package did work out a tax cut.

    Businesses engaged in alternative fuel production, alternative transportation ( bikes ) and alternative energy as 90% or more of their total revenue will see a 5% reduction in their taxes.

    “Of course, any tax cut results in potentially devastating revenue shortfalls for the State” Democratic leaders said “but we think we have more than paid for this tax by rolling back capitol gains tax reductions the Republicans wanted. We have doubled capitol gains taxes as a measure of fairness and justice. We now have the highest capitol gains taxes in the country and that is something Oregonians can be proud of just like they are rightly proud of our rapidly increasing minimum wage. It sends a message to the rest of the country that Oregon is an innovator in issues of basic equality and fairness. We feel that where fairness and justice thrive, that’s where business will go”

    Signing of the legislation is expected to take place in a ceremony tomorrow in an industrial park project that was halted midway to be set aside as a green area. Governor Kulongoski is known to have a particular fondness for this area “When we stop development and start open spaces, that’s when we start Oregon” the governor is fond of saying.

  • josh reynolds

    Rep Hanna

    May I remind you that you lost absolute contro of the House as the D’s now have their 36 supermajority votes. You can grandstand all you want on taxes, but you are out.

    • Anonymous

      Take off your diaper and grow up. This is the real world, not the one you want it to be

  • Steve Plunk

    While josh is correct about the disadvantage Republicans face that is no excuse to roll over and play dead. Common sense may still reach some of the Dems and persuade them to vote for the good of the state.

    The first target for Republicans should be the proposed increase in the gas tax and registration fees. Sure a couple cents a gallon doesn’t seem like much unless you’re a trucking company (like me) and that couple of cents turns into thousands of dollars. As it is I pay nearly 13 cents a mile to run in Oregon and registration costs exceed $40,000 every December. That’s every year, not every other.

    Not only would this gas tax hit Oregon business hard it would yield few benefits. Pro tax economists will talk about road construction jobs but the dirty secret is the words they use. The will imply jobs are created yet the reality is jobs are merely “supported” by tax and spend policies. That means nothing more than a shift of jobs since no wealth is actually created by taxing the productive class. No jobs are created and no stimulus is given to the economy. It is more likely a net loss of jobs will follow as the governments inefficiency with spending is well established.

    Republicans in Oregon need to re-establish themselves a the party of fiscal responsibility and the party that lets Oregonians keep their hard earned money. Cast your votes, pound the table, talk until you are blue in the face. Do whatever it takes to get the message across that Oregonians are overtaxed and the state overspends. The gas tax defeat should be priority number one.

  • Sybella

    General business tax ;could cause even more unemployment. I know people have the idea that businesses are just rolling in money, they haven’t got a clue.

    One good thing about it, give it two years and all those people who wanted a democratically controlled government, will find out who is behind the roll down hill we’re taking now.

    Going to be interesting. A business tax could close lots of small businesses, if it doesn’t close it, prices will skyrocket. If you don’t believe me, just wait until January when that big mandated minimum wage kicks in.

    At least I’m old enough I can shut it down if I want and go on my way.

  • Anonymous

    with the leftist illuminati’s plans for a more socialistic governement, is now the itme that we want any tax cuts?

  • guestopinion

    Corporations in Oregon, on the other hand, enjoy the second lowest tax burden in the country. Large so called C Corporations are capped at 6.6% of net income, while small sub-chapter S corporations who pay taxes on their personal return pay up to 9% of net incomes. 52% of corporations with gross revenues in excess of $25 million per year pay only the $10 minimum tax which has remained unchanged since the Great Depression. Tax exemptions exceed tax revenues in this state, including many special interest exemptions with no broad public benefit. The philosophy of the Oregon legislature up until 2006 of “if we cut it they will come’ has not panned out. Perhaps companies are wary of setting up shop in a state which is unable to consistently fund public services from year to year.

    • Sybella

      Don’t forget the federal tax rate at up to 34% for a C corporation. Plus the double taxation on dividends. Can be a huge burden for a small business. Oh, forgot the inventory tax.

      For S Corporations or partnerships to be taxed as C corporations The business, would pay a tax and the shareholders, S Corp and Partnership, would be hit with a double tax as the profits of the business are passed through to the shareholders or partners to be taxed at their rate. Included in those profits are the value of inventory on hand. That’s taxed every year. What a cash cow for the government.

      If they want to increase tax rates on a C corp, fine, but most of us are not C Corps and most of us don’t make that much money. I know most of you don’t understand this, but why punish the only ones that do add to the economy? There is a vast difference between mega- Corporations who get 25 million a year and those who get a hundred thousand dollars or less per year. And don’t forget the cost of doing business comes out of those gross receipts.

    • Steve Plunk

      Our guestopinion should also recognize the difference between gross revenue and net profit. I could easily gross $25 million but not have dimes worth of profit so the minimum tax is appropriate at $10. Individual workers making little money actually receive earned income credit, should corporation get such a credit when they lose money?

      Tax exemptions exceed tax revenue? I don’t know what you are reading but statement makes no sense. Exemptions are generally taken by individuals not corporations. Corporations get to deduct expenses. Perhaps you could enlighten us on what exemptions you are talking about after you consult whatever political propaganda you are reading.

      • sybella

        You are so correct. Actual numbers. A retail business had 3.5 million in sales. After operating costs and payroll, which is huge, there was a net profit of approximately $89,000, which was inventory on hand sitting on the shelves that hadn’t been sold. The business had to pay for that inventory, so there was no cash. You know write a check and it’s gone. That paper profit was passed through to the owners who paid taxes on that inventory on their personal tax return. Need I tell you what that did to their tax rate. Now the state wants to take more of that. Not only that, the unsold inventory at the end of this year will also be taxed, still it isn’t in the form of cash. Just inventory waiting to be sold. I wonder what the state would do if they received some of that inventory to pay the tax. Could be interesting.

    • Rupert in Springfield

      >Corporations in Oregon, on the other hand, enjoy the second lowest tax burden in the country.

      Could we have a citation please? Where did this figure come from? I looked up a number of surveys and could not find one that came even close to second lowest tax burden.

      >52% of corporations with gross revenues in excess of $25 million per year pay only the $10 minimum tax which has remained unchanged since the Great Depression.

      Um, so what?

      What is the profit of these corporations with gross receipts over $25 million?

      Do you know? How do you know they didn’t have a loss? A corporations gross revenue tells one absolutely nothing about its profitability and thus nothing about its tax basis.

      I think the citation of the Great Depression is a good one. Raising taxes, tariffs and government intervention lead directly to the Great Depression, that is if we are to believe FDR when he was running against Hoovers policies in this regard. Are you suggesting that since the Dow has fallen by 50% we repeat the experiment at this time?

      > Tax exemptions exceed tax revenues in this state, including many special interest exemptions with no broad public benefit.

      Of course, 52% of the state is owned by the federal government. It would be highly unlikely given that condition that this situation would ever change.

      >The philosophy of the Oregon legislature up until 2006 of “if we cut it they will come’ has not panned out. Perhaps companies are wary of setting up shop in a state which is unable to consistently fund public services from year to year.

      Per capita state spending in Oregon is off the charts in comparison to other states. The State budget has grown faster than inflation year in and year out. Where exactly is the basis for the statement “if we cut it they will come has not panned out”?

  • Anon

    Memo to Bruce Hanna –

    If you think that Oregon is spending too much, then stop voting YES on the budgets spending those funds.

    Or propose specifically what you want to cut.

    Or stop proposing “spending” even more money through big new tax breaks.

    Or at least stop whining.

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