Cascade Policy Institute Opposes Measure 97, the “Sales Tax on Steroids”

CascadeNewLogoAugust 8, 2016 

FOR IMMEDIATE RELEASE

PORTLAND, Ore. – Cascade Policy Institute’s Board of Directors has voted to oppose Measure 97, the 2.5 percent gross receipts tax on C corporations with Oregon sales above $25 million. It would be the biggest tax increase in Oregon history.

Contrary to union claims, Measure 97 will not simply tax big out-of-state corporations. As the non-partisan Legislative Revenue Office Report has found, it will act primarily as a consumption tax on Oregonians. The estimated cost of this tax is $600 per year for every man, woman, and child, with lower-income households being hurt the most.

As the national Tax Foundation has noted, by seeking to raise more than $6 billion per biennium, Measure 97 will increase total state taxes by approximately 25 percent. It is an eight-times-larger tax increase than Measures 66 and 67, the tax increase measures that were on the 2010 ballot.

Following the Cascade Board vote, Cascade’s President and CEO John A. Charles, Jr. released this statement:

“All corporate taxes are paid by individuals, including consumers in the form of higher prices, employees in the form of lower compensation, and/or owners in the form of lower profits. The union backers of Measure 97 know this, but cynically claim that it will simply make corporations ‘pay their fair share.’ This tactic is not only misleading, but if successful will harm every Oregon taxpayer.”

“As the two most reputable studies (LRO and PSU) on the effects of Measure 97 to date conclude, it will act largely as a consumption tax on Oregonians. As the former State Economist and chief author of the PSU study noted in March, it will be ‘like a sales tax on steroids.’ That is because Measure 97 will tax multiple transactions from production, through processing, through distribution, through the ultimate retail sale.”

“Measure 97 is especially punitive because unlike retail sales taxes that often exempt necessities such as food, medicine, and housing, Measure 97 will tax everything. Consumers will see price increases that in many cases will be much more than the stated 2.5 percent rate, without having any idea that the cause is Measure 97.” 

Two recent Cascade publications on the ballot initiative that is now Measure 97:


Like a Sales Tax on Steroids
Sales Tax by Any Other Name

About Cascade Policy Institute:

Founded in 1991, Cascade Policy Institute is a nonprofit, nonpartisan public policy research and educational organization that focuses on state and local issues in Oregon. Cascade’s mission is to develop and promote public policy alternatives that foster individual liberty, personal responsibility, and economic opportunity. For more information, visit cascadepolicy.org.

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Posted by at 12:00 | Posted in Economy, Employment, IP28, Measure 97, Oregon Government, Public Employee Unions, State Budget, State Government, State Taxes, Taxes | Tagged | 31 Comments |Email This Post Email This Post |Print This Post Print This Post
  • Dick Winningstad

    If the PERS administrators are too pralyzed to fix the system, then the new tax is need?

  • Conservatively Speaking

    Kate Brown doin’ the Hokey Pokey: Wiley Coyote left ballots are in, what’s right cast out! Zonka, zonka!
    Same old inane refrain…PERSacme elbows akin to the state of affairs, halloo, Zika virus having occupancy over on Left coasters, shill shocked over and over again. Omen!

  • DavidAppell

    Does the CPI think it’s fair for corporations to pay little or no state taxes, despite needing and taking state governmental services?

    Or are all residents of the state supposed to pay for them?

    • JoJo

      Mr. Appell. You are misinformed. Who told you corporations pay little to no state taxes? Please review the tax statement of the corporation nearest you, or get a CFO to explain it to you.

      • DavidAppell

        “24 Oregon companies turned a profit but paid no income tax in 2011,” Oregonian 3/24/14
        http://www.oregonlive.com/politics/index.ssf/2014/03/24_oregon_companies_turned_a_p.html

      • DavidAppell

        “Oregon’s Business Taxes Tied for Lowest in the Nation,” OCPP 12/8/15
        http://www.ocpp.org/2015/12/08/oregon-lowest-business-taxes/

      • DavidAppell

        “How Can Bank of America Get Away with Paying No Taxes?” Tax Fairness Oregon
        http://www.taxfairnessoregon.org/issues/bank-of-america/

      • Connie Kosuda

        jo jo – you are grievously misinformed / most corporations pay little or no tax at all / Oregon is one of the weakest corporate tax assessors in the country – time for corporations to pay up! if you disagree, please post DATA. not just ‘opinions’ from the rabid elitist horde.

        • thevillageidiot

          only consumers pay taxes. the cost of anything you buy or purchase of services such as BOA money handling you the customer pays it all there is no such thing as free checking free bank accounts etc.. including all taxes. Now if all business taxes were increased and personnel taxes decreased the tax is hidden but paid all the same by the consumer. but I get a choice on what to buy and how much.I am very much against having both sales tax and personal tax. one or the other not both.

          • Connie Kosuda

            whoa, idiot , this is a bit much even from you /

            time for corporations to pay their fair share of taxes.

            not what these whining elitist babies want to pay, but what is deemed a fair share / get used to it.

          • Myke

            Connie, its not the corporations that don’t pay their fair share, its the reduced rate on capital gains from stocks, the vehicle of the ultra-wealthy. Tax the stocks and their underlying income in a manner that is similar to labor income.

          • Connie Kosuda

            no, it really is the corporations that don’t pay their fair share of taxes / even, in many cases, NO TAXES AT ALL< in a state which is creepily over -lenient in its paltry taxation of the wealthy/and wealthy corporations / so, this appears to be a very fair measure indeed. time for some true parity!

          • JoJo

            Village – you are right, of course, in the general case, but a business that is close to the edge profit-wise – say a popular restaurant chain, or small grocery chain, or new manufacturer, well then, that business may just go out of business without being able to “pass it on to the consumer,” thus leaving a number of people without jobs to buy products from corporations having to pay their “fair share” whatever that means, of taxes.
            Taxation is theft!

          • Myke

            I’m totally for a sales tax, because of the emphasis on consumption vs an income tax that penalizes earning. But, to give those irresponsible bozos in Salem another method to take from us, NO WAY!

          • MrBill

            Maybe we should be more like Washington. Raise revenue with a sales tax and do away with the income tax.

          • Conservatively Speaking

            Seems fees-able, so long as the state income tax is nixed and property taxes made progressively comprehensible attending family establishments one lot at a time.

        • JoJo

          Connie, You are talking about “income” tax, as David Appell makes clear above. I am talking about taxes – you know, property taxes, their employees’ state and federal income taxes, unemployment taxes, surcharges, license fees, registration fees, Social Security taxes, Medicare and Medicaid taxes, etc. This doesn’t even touch the regulatory taxes, bogus fines and penalties. I’m sure other readers can explain the other taxes that I have missed. As I said, talk to a CFO or your own accountant.

          • Connie Kosuda

            no, I’m not talking about income tax. I am talking about the taxation of the wealthy and their wealthy corporations / they skate free / time for them to pay up.

      • Connie Kosuda

        reading the data attached to his posts would help you / give it a try.

    • MrBill

      Maybe a good solution would be to do the Measure 97 tax, but offset it with a reduction in personal income tax. That way, the impact to those of us who will actually bear the cost will be a wash. And you and your fellow travelers will be happy because corporations will finally be paying their “fair share”.

      • Eric Blair

        Actually, I think a reduction in the personal income tax on lower incomes would be a great idea. LOL.. although I think the “fellow travelers” comment is a little snarky. 😉

        • MrBill

          Cutting tax rates on lower incomes wouldn’t go far since the higher incomes pay the lions share of taxes. Since we’re really only talking about getting the same amount of revenue by different means, I think you’d have to cut higher income tax rates as well to truly offset the increases proposed by Measure 97.

          Snarky? A little, but no ill will is intended.

  • JoJo

    Say, I just thought of a great cartoon ad to oppose M. 97! I just read a description of the measure as “a back door sales tax.” So, picture this: Taxpayer is timidly opening a door to the right. On the other side of the door, we see a grinning figure labeled, “M. 97 – Back Door Sales Tax!”
    Is that cute, or what?

    • DavidAppell

      Maybe cute, especially if the door opens onto better funded schools.

      • Appell bin sourced

        You peer to be mutton butt a loin chop for the PERS anomalies calling out all from a Tony Bordain’s kookaburra tree. https://www.youutube .com/watch?v+UXAO-YAoo9Q

      • Dick Winningstad

        Don’t you mean better funded PERS?

    • Connie Kosuda

      cute – but not responsive / read above.

  • Bob Clark

    Yes, Comcast will just eat the 2.5% from its bottom line. Not. Big corporations tend to have oligopoly or monopoly power, meaning they have the wherewithal to most usually pass on local taxes to local consumers. And private utilities like PGE and PacifiCorp are guaranteed a ten plus percent rate of return on their capital per state law, meaning this 2.5% plus business tax will mean an increase of 2.5% plus increase in retail consumer electric and natural gas bills.

    This is why the state Revenue department estimates the average tax burden for the average Oregon family will indirectly increase by $600 per year in the form of higher consumer retail prices.

    • Bob, actually the Legislative Revenue Office report (linked in the post above) finds that the per capita state and local tax increase from Measure 97 will be $600 per year not per family, but per capita, meaning for every man, woman and child in the state,

  • Conservatively Speaking

    Auld Wikipedia refrain:

    “Pease poreridge hot, pease porridge cold,
    Pease porridge in the pot, nine days old,
    Some like it hot, some like it cold,
    Some like it in (their) pot, nine days old.”

    Today,
    PERS porridge haute, PERS porridge extolled, ,
    PERS porridge sandwiched in Paninii, Measure 97 enfold,
    Some like it along with pot, some blue cheesed with the mold,
    Just say no to whatever it is, say common sense Oregonian’s tolled.

  • Ron Swaren

    Good news to hear. And please support Bud Pierce for Governor. I’m sure he would be open minded to hear ideas from various sources. I spoke to him months ago about a transportation issue that is affecting our region and is paramount to address. We need to forget out differences and work together to retrieve this state from the disasters it is headed for with one party rule.

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