WSJ again features Oregon. Chicago Mayor and Oregon Tax

Why Chicago Loves Portland — Mayor Daley has his eye on jobs from high-tax Oregon.
Wall Street Journal Editorial,

For virtuous tax competition, we usually think of Hong Kong. But who would have thought of Chicago as a lower-tax refuge?

The bright idea comes from Chicago Mayor Richard Daley, who is looking to lure employers from Oregon after that state’s voters approved a huge tax increase last week. The tax hike in Oregon “will help our economic development immediately. You’d better believe it,” Hizzoner told the Chicago Sun Times late last week. “We’ll be out in Oregon enticing corporations to relocate to Chicago.”

Oregon raised its top income tax rate to 11% from 9% and its corporate rate to 7.9% from 6.6%, while doubling many small business tax charges and fees. “What happened in Oregon is not good news for Oregon,” explains Mr. Daley. “They believe that anybody who makes $125,000 or more [annually] or businesses or anyone who makes $250,000″”they’re gonna start taxing them. They call them ‘rich people.'”

Mr. Daley isn’t buying that. “I’ve always thought America stands for [rewarding success]. You finish high school. You work hard, go to college and you hope to succeed in life. I never knew it’s a class war””that those who succeed in life are the ones that have to bear all the burden. I never realized that. It will be a whole change in America that those who succeed and work hard, we’re gonna tax ’em more than anyone else.”

One of Mr. Daley’s biggest selling points is that Illinois’s top marginal income tax rate is 3%, less than one-third as high as in Oregon. But the Democrats who dominate the state government did try to raise it to 4.5% last year, before failing, and Chicago’s property taxes are high and its sales tax rate is a whopping 10.25%. Illinois doesn’t look nearly as good as Texas or Tennessee, which have no income tax.

Still, it’s nice to know there is at least one prominent Democrat who realizes the folly of raising tax rates to balance state and city budgets. As Mr. Daley puts it, businesses can “go to Wisconsin. They can go Indiana. They can go to India. They can go to China. So if you want to beat up businesses, go beat them up and when they leave, just wave to them, and they’re going to wave back to you.” Can we swap the mayor for Rahm Emanuel?

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  • Anonymous

    Just in case anyone was considering a move to Chicago…

    AltWeeklies.com | Chicago Reader | Property Tax Roulette
    http://www.altweeklies.com/gyrobase/AltWeeklies/Story?oid=oid%3A146684

    Couple that with a 10.25% sales tax and Daley’s overtures to Oregon businesses ought to fall on deaf ears.

  • Anonymous

    Doesn’t it tell you anything that he agrees Oregonians are not winners, but losers

    • Anonymous

      No, it doesn’t tell me anything. This is a guy who signed off on a 99-year lease of the Chicago Skyway to foreign investors (Australia and Spain) in order to repay his city’s debt. And now the Oregon Catalyst is referencing his public financing expertise? It’s absolutely mind-boggling.

      • Steve Plunk

        I believe the issue is not how good he is at finance but how poor Oregon is at treating business. If Chicago becomes attractive then how bad is Oregon?

        • Anonymous

          Daley, a democrat, is playing a political card here. Nothing more. He is counting on people’s ignorance… of him, of various tax structures, and of simple math.

  • eagle eye

    Having had considerable experience of both Chicago and Oregon, I can say that I much prefer Oregon. And I have fond memories of Chicago. But it’s a declining city. It was badly managed under the current Daley’s father, Duh Boss. And under the current Richard, it’s in decline among American and world cities.

    The Wall St. Journal is exploiting Daley’s PR stunt for its own purposes. They’ve hated Oregon for as long as I can remember — in the 90’s for its supposed environmentalism, now for its supposed high taxation policies. That’s not to say that everything’s fine here, but the WSJ has its own very pronounced agenda. I don’t take them seriously as a guide to public policy in Oregon on much of anything. And I can say this as someone who used to buy the paper every day, until their last price increase. I now buy it occasionally, and read it online. But I don’t take it as seriously as I used to.

    • Rupert in Springfield

      >But I don’t take it as seriously as I used to.

      Nonsense, you take it quite seriously, at least on this issue and act accordingly in your own life.

      The WSJ is illustrating that when the price of doing business in a state goes up, business can and will quit the state.

      You do the same.

      For in this very post you claim you quit the WSJ when they raised their cost to you!

      Excuse me Garcon! ——– Id like a glass of port to go with the irony. It really is a dish best served sweet.

      • eagle eye

        When taxes in Oregon go up as fast as the newsstand price of the WSJ has gone up over the past few years, get back to me.

        With their out-of-control pricing, I have to laugh at them, complaining about taxes all the time, especially taxes in a place they know and care nothing about (Oregon).

        But it’s not really their price that makes me take their editorial positions less seriously, it’s the editorial positions.

        • Rupert in Springfield

          >When taxes in Oregon go up as fast as the newsstand price of the WSJ has gone up over the past few years, get back to me.

          Um, the election was just last week. You seriously forgot that one?

          Measure 67 raised the corporate minimum by way more of a percentage and actual dollar figure than the WSJ went up.

          As a type S I went from $10 to $150 just for the privilege of handing in a tax form

          That alone is an increase of 1500%. I have no idea how much they raised the price of the WSJ on you, but I would be surprised if it had gone up anywhere near that percentage.

          This was all really well publicized. You seriously did not know how much things went up under Measure 67? I mean it was just last freakin week!

          You even made fun of me, saying I had a “struggling business” when I said I thought Measure 67 was outrageous.

          All of a sudden a guy who made fun of me for being outraged over a 1500% increase isn’t exactly Mr Vanderbilt when it comes to his nickels and dimes.

          All I can say is I’m laughing now.

          • eagle eye

            Poor baby! Your $140 tax increase is just pocket change on my Oregon state and local taxes. If it’s really that much of a hardship, you should consider working for someone else.

            Over the eyars, the Wall St. Journal has gone up far faster than my Oregon taxes.

  • Rupert in Springfield

    No one would ever argue that Chicago is a low tax city. However the fact that the mayor thinks that he can lure some Oregon business’s away, even with his cities taxes as high as they are, is pretty telling. While I wouldn’t argue that Daley is the kind of mayor I would want, I also would not argue he is an idiot.

    What this is is simply a very visible warning shot across Oregon’s bow. It’s the less visible shots are the ones Oregon should be worried about. The more collectivist minded of us always like to say “we are all in this together” and thus they portray the aftermath as Oregonians showing they are willing to raises taxes on themselves. Nothing could be further on the truth, as 66 and 67 were sold specifically on the lie that that if one was not rich, one would pay nothing more.

    “We are all in this together” is the rallying cry of the collectivist, however when the suggestion that maybe it follows that we should all pay together is made, the collectivist tends to shirk away. The great enigma of the matter is why when the collectivist flees when he hears “Then let’s all pay for this together!” the connection is not made that if he is fleeing, wouldn’t business be right behind him? If the collectivist feels he should not help pay for the nebulous “THIS” we are all in it together for, what in his mind makes him think the business will hang around to do that which he will not?

    Nevertheless, tax advocates always like to say that higher taxes lead to better schools and services and that attracts business and grows the economy. We shall see. However I hear very few stories of business moving to Oregon and plenty of them moving out. When Facebook moving to Eugene with a whopping 35 jobs is a blockbuster story for a couple of days, it tends to make me think the bait of high taxes is not the business attractant the tax raisers seem to think it is.

    Mayor Daley might get no where, but the fact that he thinks can even make a reasonable pitch at all that his high tax city is still a better deal than Oregon’s outrageous rates says a lot. I don’t think many would bet money that Daley will get anywhere. However I think far more would wager on Daley being successful than would bet that more business will move to Oregon because they like how we raised our taxes.

    WARNING – I HAVE USED PHRASES AND WORDS LIKE “MANY” AND “A LOT”. THOSE WORDS MEAN A PORTION NOT THE WHOLE.

    IF YOU CONFUSE THE WORDS “MANY” WITH “EVERY” OR “ALL” PLEASE STAND BACK FROM THE POST AND CONSULT YOUR USERS MANUAL TO THE ENGLISH LANGUAGE, A DICTIONARY.

    • valley p

      “However I hear very few stories of business moving to Oregon and plenty of them moving out.”

      The ones moving in are the ones you complain about. Bicycle frame makers, solar collector companies, and wind turbine executives. Right there in Eugene Rupert, a solar collector company is moving into a shuttered plant no? You didn’t read about that? You are spending too much time at Catalyst, which would never report on such a thing.

      • Bennie

        Great, companies that wouldn’t survive with out subsidies (wind, solar,bio fuels). But unfortunately Teddy will surely throw more of our tax money that we don’t have at them. I’m glad that Teddy protected all of those Gas Pumping Jobs. That and Star bucks jobs will be about all we have left.

      • Rupert in Springfield

        Good lord, you really are going with this? I am talking about business fleeing the state due to high taxes and you pick the one type of business that Oregon is notable for giving tax credits to entice into moving here as an example?

        Did you think for three seconds about that?

        What kind of nitwit picks an industry that gets some of the heaviest tax subsidies to counter an argument that increasing taxes might make business leave?

        It is especially noteworthy that you happened to pick a company that is moving into the Hynix plant.

        What is the Hynix plant famous for? What was it originally built for?

        Memory Chips!

        And how was Hynix enticed to build it?

        Tax abatements!

        So you picked an industry that gets heavy tax subsidies, that is moving into a plant that was built in the first place only due to tax abatements to counter an argument that high taxes don’t induce business to move to a state.

        Low taxes got the plant built in the first place, and the tax subsidies to green energy are notorious, and you picked that example.

        This will most likely be your most foolish post of the month. Seriously, do you actually know anything? I mean you really didn’t know Hynix was built due to tax abatements? I thought everyone in Oregon knew that. Clearly I was wrong.

        Garcon! – Another glass of port, and another serving of irony please!

        • valley p

          “Did you think for three seconds about that? ”

          8 or 10 at the least. I’m sure it was 10 come to think about it. Its hard to form a complete thought in only 3 seconds. Too many distractions.

          “What kind of nitwit picks an industry that gets some of the heaviest tax subsidies to counter an argument that increasing taxes might make business leave?”

          The kind that was not making a point about taxes, but about your admitted ignorance of what is in the local media with respect to new business moving in. Bicycle frame makers by the way, get no tax subsidies I am aware of.

          “This will most likely be your most foolish post of the month.”

          Oh ye of little faith. Its only the 2nd day of the month. A short month I admit. But still a lot of time to top that one. Stay tuned.

          “Seriously, do you actually know anything? I mean you really didn’t know Hynix was built due to tax abatements? I thought everyone in Oregon knew that. Clearly I was wrong.”

          Yep…I know a thing or two. I know that not everyone in Oregon knew about what tax abatements Hynix got. I’m pretty sure there are a lot of Oregonians who never heard of Hynix period. I think only about half can identify their representative in congress. So we agree that you were wrong. That is a start Rupert. A small one, but a start. Let’s see if we can build on it.

          • Rupert in Springfield

            OK – Well another brilliant Dean conclusion – The fact that I did not mention a business lured by tax breaks when making a point about tax increases causing business to move means I don’t know about the Hynix agreement.

            Dopey logic to the last.

            >Yep…I know a thing or two. I know that not everyone in Oregon knew about what tax abatements Hynix got. I’m pretty sure there are a lot of Oregonians who never heard of Hynix period. I think only about half can identify their representative in congress. So we agree that you were wrong.

            Well, clearly one of the two things you know does not include the fact that the entire plant was built because of tax abatement. I gave you the opportunity to just say that you hadn’t thought that aspect through, but if you wish to say you were simply ignorant of that key fact, that works just as well.

            You have to admit its pretty funny though. In your attempt to make it seem that I was ignorant of the goings on in Eugene, you only showed that you were totally uninformed about the nature of the something it turns out I know a lot more about than you!

            As Homer Simpson would say – “DOH!!!”

            I’m loving it.

            If it makes you feel any better, I will totally admit I was wrong on March 1 if you make a bigger flop than this gem by the end of the month. I personally don’t think its possible but when you are dealing with a guy who can never admit he is wrong you never know!

          • valley p

            “However I would support just about anything that would teach Oregon a lesson on this one. The trade off would be worth it in my book.”

            So if the lesson is that targeted tax breaks work, then you would support the BET program?

      • Jerry

        Wow – a bike frame maker. That will sure help Oregon’s massive unemployment. That is really something. Bravo!

        • Anonymous

          You’ve got a problem with bike frame manufacturers now too? Wow – you just can’t be pleased.
          Personally, I think the two or three dozen jobs they’ll create is a substantial contribution.

        • valley p

          125 cycle businesses and nearly 1000 total employees in the Portland area Jerry. And no layoffs in the current downturn.

          All big things start small. Nike was once a shoe stuck to a waffle iron. And at least bicycle manufacturers are making something useful. That is rare in America these days.

          Ridiculing entrepeneurs, teachers….do you have a 2nd act?

          • dartagnan

            “All big things start small. Nike was once a shoe stuck to a waffle iron. And at least bicycle manufacturers are making something useful.”

            And they’re making it in the USA, which is more than you can say for Nike products.

            I can’t understand conservatives. A guy like Phil Knight makes billions by sending American jobs overseas and selling crap from China and other low-wage, Third World countries to Americans, and conservatives see him as some kind of savior.

    • dartagnan

      “However the fact that the mayor thinks that he can lure some Oregon business’s away, even with his cities taxes as high as they are, is pretty telling.”

      What it tells me is that Mayor Daley is a blowhard and a publicity hound. Let me know when all those businesses actually start leaving Oregon for Chicago, okay?

      • Bennie

        I’m sure Chicago is not where a lot of businesses are looking to locate, though some may be. I doubt a lot are looking at Vancouver as the Queen will soon be raising taxes there (maybe even a income tax). I think most that can move will be looking south. Daley may be a blowhard, but I’m sure a lot of other Mayors in the country will be poking around here with interest.

        Oregon doesn’t want them, so let them go in peace.

      • Rupert in Springfield

        >Let me know when all those businesses actually start leaving Oregon for Chicago, okay

        Sure. Daley got Boeing there with tax incentives, I’m sure he can pick off a few Oregon companies.

        I think in the spirit of bipartisanship, a lot of Republicans here applaud his efforts. I sure do.

        Anyway, we have businesses leaving Oregon for lower tax areas all the time. That’s why we only have one Fortune 500 company left in the state. Usually its pretty well noted in the news, like when Freightliner left, but you can probably check back here as well.

        • valley p

          “Sure. Daley got Boeing there with tax incentives, I’m sure he can pick off a few Oregon companies.

          I think in the spirit of bipartisanship, a lot of Republicans here applaud his efforts. I sure do.”

          Just up above you said you don’t like targeted tax subsidies. Now you do? Can you now see why some of us get confused about your positions? Which is it Rupert?

          • Anonymous

            I think Rupert is just excited to see Daley politicking against other Democrats and scrambling to save his office. His allusion to a “spirit of bipartisanship” is laughable. I think we all know, whether we share his views or not, that Rupert doesn’t have a bipartisan bone in his body.

          • Rupert in Springfield

            >Which is it Rupert?

            I don’t support them. I frankly would prefer Daley to lure business away from Oregon with an overall lower tax climate than with tax incentives.

            However I would support just about anything that would teach Oregon a lesson on this one. The trade off would be worth it in my book.

            > I think we all know, whether we share his views or not, that Rupert doesn’t have a bipartisan bone in his body.

            Well, considering I regularly applaud Democrats here when I like their actions and criticize Republicans when I don’t like theirs.

            And considering I am married to a far left Democrat and regularly mention her here.

            And considering that I would guess that Republicans are at most 10% of my friends, and I also mention that fairly regularly as well.

            I think with all of that considered this is the prudish liberal troll guy who likes looking for nude pictures of people so he can be offended.

            Nice to see my stalker guy is back!

            Missed ya baby! – kiss kiss

          • Anonymous

            yawn

          • valley p

            Most businesses in American and Oregon, probably 70-80% are either retail or service sector. This means they exist where they do to sell things to the local population. Dry cleaners, Wallmart, most architecture and engineering firms, grocery stores, party planners, and the like. You can’t lure these businesses in with an across the board low tax rate. You can’t lure them in with targeted tax breaks either. They will exist regardless of the tax rate as long as they can make a buck. If one closes down another expands or is created to fill the niche. If someone can make a buck they will.

            The other 20-30% of the economy, a very crucial part as it turns out, is called the “traded sector.” These are businesses that create products or services that are sold outside of Oregon, or even outside of the United States. The bicycle makers you disparaged are among these. As are nurseries, grass seed growers, cattle ranchers, hazelnut and hop growers, wheat farmers, and most timber companies. As are Nike, Columbia Sportswear, and Adidas. As are the wind turbine and solar collector makers we have lured in.

            Some of these traded sector businesses, particularly agriculture and timber related, pretty much have to be located here because this is the best land in the nation (and world) to produce their wares. High taxes hurt them, and can make them less competetive with other regions. But unless the taxes are real high they are not fatal. They just cut into profits.

            That leaves the companies like Nike and the alternative energy folks and others who can pretty much locate anywhere. Targeted tax breaks, credits, or incentives are aimed at this group because if we don’t do so then Mayor Daley or the governor of South Carolina will. In this day and age if you want a healthy traded sector you had better offer them something. And that is what we do. Abandoning that is what would drive businesses out of Oregon, or prevent new ones from setting up shop here instead of somewhere else..

        • Anonymous

          “I think in the spirit of bipartisanship, a lot of Republicans here applaud his efforts. I sure do.”

          So you applaud efforts to steal businesses and jobs away from Oregon, because if they succeed it will make “the other side” look bad. Putting partisan advantage ahead of the well-being of your state and your fellow Oregonians — how quintessentially Republican of you.

          Thanks for showing your true colors.

  • Richard

    I would not discount Daley,a fer all he got Boeing to move Headquarters and might like a chuck or Nike or Intel to go with it.
    The message you all are forgetting is if Chicago can convince that Chicago is a better deal, what that say to Oregon. What this say to other states that have far better deals for business.

    I see Detroit in Oregon

  • LFTOREGON

    Speaking of bicycle shops, how about wind mills in the Gorge? Or is that NIMBY? The United States isn’t the only place Oregon Corporations could relocate…Canada and Mexico are rather close don’t ‘ya think? I believe Nike headquarters are in Toronto…why should Oregon corporations stay? When I was young, I was told if I work hard I could achieve anything I wanted to be. Now, it seems as though if a person is an achiever, they are punished by being over taxed. Why should some work hard to achieve success, while others sit on their butt’s and ask for handouts? I believe over taxing takes the incentive to achieve away…Listen carefully to what the politicians and media are telling you…is it really OK to take from one another? or in other words; if your neighbor has more than you, you deserve some of theirs? or is it just OK to take from someone you don’t know? I agree with Mr Daily’s words…this administration has fueled the fires of a class war. People can only take so much before they explode…

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  • Ted Erso

    Businesses want to move overseas for the cheap labor. All the tax breaks in the world won’t keep them from leaving the US.

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