Measure 97 was an attempt to impact one type of corporation. A “C-corporation” is an IRS designation for a business that pays its own taxes. In Oregon, C-corporations pay either a “minimum tax” of roughly 0.1 percent on sales or 6.6 percent on taxable income up to $1 million; taxable income over $1 million pay a 7.6 percent tax or whichever amount is greater. The minimum tax on sales is capped at $100,000.

If Measure 97 had prevailed at the polls, it would have altered the minimum tax on sales: the cap of $100,000 would have been jettisoned; sales above $25 million would have been taxed at a rate of $30,001 plus 2.5 percent; and, sales below $25 million would have continued to be taxed at roughly 0.1 percent. C-corporations with a high enough income would have continued to be taxed according to their income versus gross sales.

Businesses known as “benefit companies,” (those that adopted goals to help communities and the environment), also would have been exempt from the increase. C-corporations with $25 million or less in sales would not have been affected by the change. A corporation with $100 million in sales would have seen its minimum tax obligation increase from 0.1 percent to 1.91 percent.

As the managing partner in a mid-sized accounting firm employing 18 FTEs year-round (and up to 24 during the busy tax season), I don’t believe in a tax on sales. You’re scaring off potential new business. We want to be business friendly. We want to tax people (for their individual choices and preferences) not a tax on sales (that would be passed along to everyone.)

Think of an example of a grocery store. Whereas they have huge sales they only have a 2 to 3 percent profit margin. A sales tax would simply be passed on to the consumers. It’s regressive and punitive. The people who can least afford it would pay the price, pay the tax (through the new, higher prices for their purchases.)

The reason behind Measure 97 — and now the behind-the-scenes attempt by the Legislature — to generate additional funds for the state’s budget was earmarked for our schools and the continued funding of the state’s Public Employees Retirement System (PERS). Granted, PERS is chronically underfunded and has led to less hiring for schools and larger class sizes.

But, in spite of the biannual state budget having increased 14 percent over the prior year, the Democrat-controlled state Legislature is currently overspending their available funds and are, therefore, not fiscally responsible. And now they’re looking for another way to tax businesses to fund their irresponsible actions.

Sen. Mark Hass, D-Beaverton, said immediately after Measure 97’s defeat that lawmakers would propose a more “reasonable” tax revenue proposal next session to offset a $1.4 billion revenue shortfall in the 2017-18 budget.

But, new and/or additional taxes on businesses are clearly not business friendly and not supported by the majority of Oregonians. On the flip side attracting new businesses with greater employment would raise tax dollars not drive away the businesses we already have. We need to put more people to work. If we’re pro-active then one new job’s impact would circulate seven times for additional tax dollars.

An example would be if Oregon were to issue more permits for environmentally sound logging we could create more jobs. If we were to open up our state forests to the timber industry, we would have a more sustained yield of timber and we would create more jobs.

Seventy percent of Oregon’s forests are owned by the federal government who pay no taxes. But when you thin out forests they explode in growth. You make the forest safer, you spend less on fire-fighting and you create jobs and tax revenue.

I’ve lived in Klamath Falls for some 34 years. My wife and I, along with five adult daughters and 10 grandchildren, all call Oregon home. All I want is a future for them in Oregon with good paying jobs. Fostering new businesses and jobs within the state can help the state prosper and generate the new tax dollars we need. The Democratic legislature’s plan to further tax our businesses is nothing but a path to the state’s decline and an anti-business environment.

To read this article and others on the H&N website, please refer to the link below:

Oregonians Already Said No to Additional Corporate Income Tax (Herald and News)