A tax by any other name

Some days it just feels like déjà vu all over again.

Less than sixty days into the session, the Democrats have proposed yet another tax increase on business — the elimination of the corporate kicker. Predictably, just like they have done for the last six years, the Portland Business Alliance and the Oregon Business Association have jumped immediately forward to support it. Has there been a tax increase on business in the last six years, state or local, which these two groups haven’t supported? Both organizations speak for Portland’s major business elites. Neither of them speaks for Oregon’s main street business interests.
The Portland Business Alliance is dominated by the state’s banking, utility and insurance interests. Their ranks have been, and are, populated by former senior staff members of the Goldschmidt, Roberts, Kitzhaber and Kulongoski gubernatorial regimes. There have been a succession of PBA leaders that have dutifully taken the stage with a succession of Democrat governors, endorsed their tax increase proposals, got their picture taken with the governor for their “vanity walls”, and promptly moved across the river to Vancouver upon retirement to escape the burden of their own actions. For the banks and utilities tax increases are an automatic pass through to their Oregon customers. They do not compete outside of Oregon and, therefore, do not suffer a competitive disadvantage because of high taxes.

The Oregon Business Alliance is the brainchild of Nick Blosser, one time finance chairman for the Democrats and husband to former House Democrat Leader, Deborah Kafoury. He was joined by Linn Lundquist, a former Republican Speaker of the House who was rejected by his own party for a second term and was then rejected again by his party for a gubernatorial bid. Given Lundquist’s high profile support of every Democrat economic proposals since his rejection by his own Republican Party, one has to wonder whether it is warped principle or wounded pride that drives his actions. Lundquist boasts of a master’s degree in agricultural economics but he apparently didn’t attend those classes which discussed how tax increases impose a competitive disadvantage on Oregon’s agricultural community vis-à-vis agricultural interests in other states.

But the surprising aspect is that they have been joined by the Associated Oregon Industries. Ever since the retirement of former AOI President, Richard Buttrick, the association has begun to migrate toward the same policies as the Portland Business Alliance and Oregon Business Association. That’s not surprising given the overlapping directorships of the same banks, utilities and insurance interests on AOI’s board of directors and the waning support of the former powerful timber industry.

So who represents main street business interests? Well, most assuredly not them. Before anyone assumes that business supports this latest tax increase, you might want to ask the National Federation of Independent Businesses, the local chambers of commerce, the Oregon Taxpayers Association and the various trade association representatives. In fact, let’s make it easy, call your local merchants and ask them what they think of this increase in taxes on main street business.

So why do the Democrats need this tax increase? Mostly, it’s because they are Democrats and they have this insatiable urge to raise taxes. They haven’t been in the legislative majority for a dozen years and the itch has simply become uncontrollable. Yes, I know, they say they need it to fund a “rainy day fund.” Nice try but the state is currently awash in tax revenues. This legislature has nearly $2 billion (that’s BILLION with a “B”) more this biennium than last and the pot is growing with each succeeding revenue forecast. A rainy day fund isn’t a bad idea but in this instance it is just another tax increase on business because there are already sufficient funds to pay for it and all the other legitimate increased spending that will be considered by the legislature.

But that’s not the whole story. The Republicans have floated a plan that would exchange elimination of the kicker for business for a reduction in the capital gains tax and the inheritance tax and still create the rainy day fund. Not surprisingly the Democrats are ignoring it because it means small businesses might get a break. Not surprisingly, the Portland Business Alliance, the Oregon Business Association and AOI appear to be similarly ignoring it. Is a picture with the governor really worth ignoring your real business interests?

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Posted by at 07:07 | Posted in Measure 37 | 5 Comments |Email This Post Email This Post |Print This Post Print This Post
  • Keen Observer

    What’s your take on “Deal” the Rino’s cut with the D’s on 2-28?

  • Jerry

    The fools. Quit with all the taxes, will you? Enough is enough.

  • Anonymous

    So when in the previous session estimated revenues that fell far short of expectations occurred, that was a huge tax cut?

    Your pretzel like logic in trying to spin this into a tax increase is comical.

  • John Fairplay

    You’re comparing apples and oranges. What act of the Legislature caused revenues to fall? There wasn’t one. This is a tax increase precisely because the Legislature will take positive action to increase the amount of money government will have to spend.

  • T&T

    uotes from Governor Mitt Romney on the Budget

    * “When I was running for office I had a debate as you may recall, actually five of them. Don’t know whether you saw the one where Tim Russert was the moderator. He wondered how we were going to be able to close a $1 billion budget gap. And I had to lay out what my plans were for doing so. When I got in office, my Secretary of Finance came to me and said, I’ve got great news and bad news. The great news is we don’t have a one billion budget gap. The bad news is we have a $3 billion budget gap. And there were some people that said all we have to do is raise taxes. And I said, look, if you raise taxes you kill jobs and you hurt working families. There were some other people that said why don’t we just raise debt. We can just borrow our way out of this. But if you raise debt you just put our problems on the backs of our kids. I said no, we’re going to go back to government, we’re going to cut out the waste and inefficiency and duplication. We’re going to do the job we were elected to do. And Republicans and Democrats came together and made a lot of that happen.
    o Governor Mitt Romney, NH Federation of Republican Women’s Lilac Dinner

    * But Romney said the overall level of spending growth in the budget “is simply too high.” He lamented the fact that it relies on $550 million in rainy day funds at a time when the state is experiencing record high revenue collections. Source: 07-08-2006 Press Release

    * “Rainy day funds should not be spent during periods of robust revenue growth to support a level of spending that is not sustainable,” Romney said. “We are repeating the mistakes of the past, and it would be irresponsible to allow this budget to become law without making significant reductions.”
    o Governor Mitt Romney, 07-08-2006 Press Release

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