On Tuesday, the House Democratic leadership formally unveiled their plan to raise $275 million in new tax revenue for the current state budget cycle. These tax hikes are permanent. The legislation will be contained in HB 2456.
The tax hikes proposed by the House Leadership are on the same Oregon businesses and taxpayers whose taxes were permanently increased by Measure 66 and 67. This will be the second time in 4 years that House Democratic leaders are targeting the same businesses and taxpayers with additional permanent taxes.
Measure 66 permanently increased taxes on businesses and taxpayers with $125,000 incomes for single filers or $250,000 for joint filers. Measure 66 raised their tax rate from 9% to 9.9%. Measure 66 has already increased taxes on these individuals and businesses by $375 million per biennium.
Now, House Leadership wants to raise taxes again on the same taxpayers by eliminating their itemized deductions, a tax increase of $169 million on top of the Measure 66 tax increases. The largest itemized deductions for these taxpayers are the mortgage interest deduction and deductions for charitable contributions.
House Leadership is also proposing to eliminate the personal exemption credit for the targeted Measure 66 taxpayers, a tax increase of another $38 million on top of the Measure 66 tax increases.
Measure 67 raised corporate taxes by implementing a new corporate minimum tax on unprofitable businesses. For Oregon companies with gross sales of $100 million or more, the new Measure 67 minimum tax is $100,000 for these companies whether they are profitable or not. Measure 67 raised taxes by $230 million on Oregon businesses.
House Leaders are now proposing a straight gross receipts tax on these companies. Under their proposal, a new gross receipts tax of 0.1% of gross sales would apply to these large companies. This is an additional $50 million dollar tax increase on top of the Measure 67 tax increases.
AOI has grave concerns about the tax proposal, including:
1. The 2009 Oregon Legislature already raised taxes on these same taxpayers and businesses by $600 million (2013-15 projections), now they are proposing that these same taxpayers pay an additional $275 million.
2. There is already $1.5 billion more in tax revenue this budget cycle than in the last, an increase of more than 10% – there is no compelling reason to raise even more revenue.
3. If the legislature wants to find more resources to fund school budgets and other critical services, it may do so by passing comprehensive PERS reform (SB 754) and free up over $1 billion in new resources. It is unreasonable to ask Oregonians to pay more taxes simply to pay for out-sized PERS benefits.
4. If the legislature wants to find more resources to fund school budgets and other critical services, it may also do so by focusing on policies that will grow Oregon’s economy and create jobs for more Oregonians, creating more taxpayers and increasing long term tax revenues.
Now is the time to call your state representative to express your concerns about this tax measure.
If you don’t know your state representative, you can find them here.
You can find a summary of the new tax legislation here.
You may also direct your comments to the House Revenue Committee, where House Bill 2456 is being drafted.
Representative Phil Barnhart, Chair
Representative Vicki Berger
Representative Tobias Read
Representative Cliff Bentz
Representative Jules Bailey
Representative Jason Conger
Representative Sara Gelser
Representative John Davis
Representative Jessica Vega Pederson
EDITOR’S NOTE: KATU (AP) also covered this on Tuesday, and their coverage includes this quote from Rep. Peter Buckley (D-Ashland) “I think 66 and 67 were shown to be popular with the voters.” Rep. Buckley then goes on to try to mislead Oregonians that “We’re asking Oregon corporations to pay a bit more to help fund education,” instead of admitting that he and his public employee union-owned caucus are looking to raise taxes again on Oregon’s high income earners and on Oregon’s employers to pay for past PERS excesses.