By Taxpayers Association of Oregon
The Legislature has been debating the 2019 Corporate Activities Tax which has pummeled businesses in Oregon. It is one of the most cruelest of all taxes because it taxes revenue instead of profit which means it wrenches high taxes even if the company is bleeding money, near bankruptcy or in a recession. This is why only a few states are stupid and reckless enough to have a tax based on only revenue (gross receipts).
Not only is this unfair, but it turns out that such a revenue tax is a killer for certain industries like pharmacies and precious metal dealers. Pharmacies deal with high priced medicine but low profit margins. Precocious metal dealers deal with high priced items like gold, which is expensive, but comes with low profit margins in a high risk industry where values change unexpectedly. This week in the State Capitol rational minds tried to provide some relief for these industries as the CAT tax is disproportionately punishing to them. As we often state, the CAT tax wiped out the entire Bi-Mart pharmacy chain in Oregon. Yet liberal lawmakers refused to budge this week and rejected any small changes to the CAT tax. They said they didn’t want to lose any more funds from the tax despite the fact that the CAT tax is exceeding projections and the State of Oregon, on the whole, is witnessing record breaking revenues.
The CAT tax revenue goes to the education budget and the teacher union lobby won’t spare a penny lost — even if it means watching entire collections of small businesses go out of business.
Don’t forget that this same education union lobby also supported de-fund the police candidates in the last election, showing that they do not even care about other government employees (just their narrow interest) or the terrifying impact of the defund police efforts had on crime in Portland.
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