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The Oregonian Endorses OBA Corporate Tax Plan Aimed at Protecting Schools and Investments in Economic Future

In response to the current economic crisis, OBA has put forth a comprehensive budget proposal that includes a corporate tax package representing a willingness to contribute additional revenue to protect schools and other vital public services.

OBA's leadership has been in daily discussions with legislative leaders on these important budget and revenue issues. We hope for a resolution that protects both Oregon jobs and investments in our universities, research centers and public schools.

The Oregonian weighed in this morning and below is their editorial.

Click here to read today's editorial at OregonLive.com

THE OREGONIAN - Wednesday June 3, 2009

Keep New Business Taxes at a Minimum
by The Editorial Board

This is a moment to insist that Oregon businesses step up and help protect the universities and public schools essential to them and to Oregon's future.

It is not the time to try to fix all that lawmakers see wrong with the corporate tax structure, not the time to pick a fight with no winners, not a time to load too much onto the shaky legs of Oregon business.

On Tuesday, Democratic leaders pushed forward a bill that would raise about $260 million in additional corporate taxes and filing fees over the next two years. Their proposal included a temporary four-year increase in corporate excise taxes -- and a permanent tax increase on corporations with annual net incomes of more than $10 million.

In other circumstances, such a proposal might make sense. Oregon corporations pay some of the nation's lowest business taxes, including an absurd $10 minimum tax paid by about two-thirds of Oregon companies. Over the past 25 years, the Legislature has steadily reduced the business tax burden; now corporations pay less than 5 percent of Oregon's general fund.

We know the arguments about taxing businesses, which create the jobs and generate the personal income that Oregon taxes. Economists debate who bears the burden of corporate income taxes. Ultimately, of course, taxes are paid by people, not entities. But corporate and individual taxes fall on different people.

In any case, these are not ordinary times. Business is flat on its back. State revenues have collapsed, and the Legislature is trying to stave off deep cuts in education, human services and public safety. Voters are in a sour mood, and efforts to raise taxes in neighboring states either have been quickly abandoned or killed at the polls.

This is the wrong time for Democrats to call the question of corporate tax policy in Oregon. Yes, they have supermajorities in both chambers, and a Democrat, Ted Kulongoski, in the governor's office. Yes, they could ram through significant and permanent corporate tax increases without Republican or business support.

But any large tax increase is almost certain to be referred to voters. And without key business leaders and groups willing to explain and defend the proposal, there is virtually no chance that it would be upheld by voters -- wiping away crucial business support at a critical time for Oregon education.

There is a better way. One of the state's leading business advocacy groups, the Oregon Business Association, has countered the Democrats' proposal with a compromise that raises $220 million in additional corporate taxes and fees over the next two years. Key differences with the Democrats' plan include much smaller increases in the corporate minimum tax and only temporary jumps in corporate excise taxes, which would decline in the fourth year before sunsetting. The OBA is asking lawmakers to dedicate the revenue from the additional corporate taxes to universities, research centers and public schools.

It's a good plan. Moreover, if this corporate tax increase goes to the ballot, the Legislature would have on its side a powerful business group representing hundreds of the state's largest companies. Other business groups have privately pledged neutrality, if not support, if the OBA plan goes to the voters. For now, that's all Oregon can ask.

Click here to read today's editorial at OregonLive.com