Is Oregon Getting More Business Unfriendly?

CascadeNewLogoBy Steve Buckstein

Oregon is known as a small business state. Few large corporations are headquartered here, and current policy debates in the legislature and measures headed for the November ballot threaten to make our state even less friendly to business than it already is.

Two recent publications document how bad the outlook for Oregon’s economy is now. The Eighth Annual Rich States, Poor States report from the American Legislative Exchange Council calculates every state’s Economic Outlook based on fifteen public policies under state control such as personal and business tax levels, minimum wage rates, and Right to Work status. On this scale, Oregon has slipped from 35th in 2008 to 45th today.

The Small Business Policy Index for 2016, published by the Small Business and Entrepreneurship Council finds that “Oregon offers the eighth worst policy climate for entrepreneurship and small business growth among the 50 states.” It comes to this conclusion based in part because “Oregon imposes the second highest personal income and capital gains taxes, high unemployment taxes, a state death tax, and a high state minimum wage. Oregon also has a weighty energy regulatory burden.”

In light of such findings, should certain state legislators, union leaders, and political activists be promoting a massive increase in Oregon’s minimum wage rate and a drastic increase in corporate taxes? Of course not. But don’t expect economic reality to always win the day. If it could, Oregon’s economic outlook would be a lot better than it is.

Steve Buckstein is Founder and Senior Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy research organization.

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  • fred291

    Maybe the Annual Rich States, Poor States report and the Small Business Policy Index just aren’t very good predictors of Oregon’s business outlook. We have consistently ranked poorly in those reports, but over the past 15 years OR has the fastest GDP growth in the US, the second fastest percapita GDP growth, and one of the fastest growth rates in median wages/income. I think a better argument against IP28 or a $15 hr. minimum wage is that we’re doing relatively OK, don’t screw it up. If you want to look to dark clouds, OR’s economy is heavily dependent on trade and tends to weaken when the dollar is strong – the dollar is strong right now and looks like it’s getting stronger.

  • Bob Clark

    The Portland Metro area currently is in economic boom of sorts. A large portion of this is due to population immigration from other U.S states. A big chunk of net in-migration is from neighboring California where combined tax burdens seem even higher than Oregon’s, and then too, California is population saturated due to its beauty and pleasant climate overall. With the genesis of technology in California, California has become highly priced. So, thus the restart of population shifting to Oregon after slowing greatly during the Great Recession. The Great Recession created a large pent up of Oregon traditional net in-migration.

    Say what you want about Kitzhaber (and I have), he did manage to keep state taxes in check, even giving Nike and Intel and others so-called Tax certainty, after 2010 while other states raised taxes. So, Oregon has been inviting in some ways in attracting in-migration of late. Moreover, many moving here are of young professional age and have been brainwashed by the “Green” public school doctrine. Oregon continually talks up its green creds. So, currently there is this economic rent available for the taking by our big spending state and local (Portland Metro) governments. For those longtime Oregon residents, it’s a loss of sorts having to pay up because of new residents pouring in. Many existing Oregon residents end up moving to the state of Washington where there is more constraint on the state’s taking of new economic rent.

    The real cost of state and urban center government in Oregon is government tends to live beyond its means in economic boom times, spending most all of the surplus, taking on more debt, doling out more public employee benefits. Then inevitably the economic slow down occurs, and then, these governments use children and other groups to push for further increases in tax burdens. Economic rent taking is embedded in our current government, depriving the private sector of optimal means to produce an even more prosperous economy than we are normally being left with. Instead a large complex of crony entities (the “green” industry less visible than Sylvia Hayes) like the “green” industry, public employee unions, and trial lawyers effectively receive the economic rent taken by the state and local governments; and in return, these crony entities donate large sums to the politicians carrying on this existing government regime in Oregon.

    I guess it’s hard to blame the urban Oregon electorate for continually allowing such corrupt governance, it’s a pretty hard-to-track con.

    • Tom McCall how great he was

      Fiery well stated.

  • Connie Kosuda

    much more important is the status of Oregon with respect to the friendliness shown to all its populations / obviously, this is of little concern to most of the readers of the “catalyst” / doling out mega – millions to one of the fifth largest corporations in the world (INTEL) – reduces the pool of capital to provide truly affordable housing for all socioeconomic groups/ adequate competitive education for all children, and, yes, of course, a substantial raise in the minimum wage.

    capitalism does not require a hellish existence for most of its victims / it only has this effect when the elitists fail to consider the consequences of their actions on the mass of the population.

    • While crony capitalism does have victims thanks to collusion between “elites” and government, true capitalism does not. Voluntary transactions between buyers and sellers add value to both sides – everybody wins.

      Government-imposed minimum wage laws, for example, aren’t win-win. They turn purported compassion of legislators and/or voters into compulsion toward employers. In many cases, everybody loses as employers can’t afford to pay less-skilled workers what the law demands, so they let them go or don’t hire them in the first place.This is just one example of how government mandates on the economy are lose-lose for everyone ,except perhaps those politicians who gain donations and votes from the gullible.

      • Connie Kosuda

        except for the fact that a voluntary transaction between a buyer and seller requires the buyer to have sufficient funds to engage in the transaction at all / many sellers have no compunction about charging more to the poor (this includes hospitals charging more to the uninsured for the exact same surgical procedure, for example).

        and of course, many jobs have seen wages reduced (!) (part of the decimation of the middle class) –

        while profits to the top 1-3% have skyrocketed.

        that is what is evil.

        and that is what forces working families to hold multiple jobs to make the same or less income that they used to be able to make with one job alone.

        and this is the well-trained, well-educated class. go figure.

        a sick society.

        • Of course capitalism isn’t perfect. But the alternative is much, much worse. As the World Bank recently noted, it’s economic development and globalization that have lifted a record number of the world’s poor out of poverty.

          Isolated, government-controlled economies have harmed the poor, while relatively free economies have helped them.

          • Connie Kosuda

            got any stats on that / sources of info?

            sounds completely erroneous. the World Bank thinks it helps people other than itself?

          • Connie Kosuda

            this link is unresponsive / will try again later.

            when you speak of ‘economic development’ you are no doubt referring to what folks talk about when they ‘make a killing’ reaping the benefits a country has to offer while destroying the lives and quality of life of the poor /

            globalization is a term which on a larger scale refers to what Washington County does with its gentrification projects / again, destroying the already sparse quality of life of the poor / while the rich reap the resources / get the tangible and fiscal benefits, and decimate the environment (like INTEL)

            in any event, you are inferring what by a reference to the World Bank???? a step above abject poverty a la wage slavery is okie dokie for a democracy such as ours?

            the alternative to capitalism meaning what?

            how and why?

  • Connie Kosuda

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