What will the moderate revenue increases passed by the legislature mean?
An increase in the corporate minimum tax rate for the first time since 1931.
Currently, two‐thirds of corporations doing business in Oregon pay just $10 a year in the corporate minimum income tax. The new minimum will start at $150—which is what most businesses will pay. Even large businesses will pay no more than one-tenth of 1% of their Oregon sales.1
Increase the marginal tax rate on corporate profits above $250,000 by 1.3%.
Profitable corporations will, for the next couple of years, pay an additional 1.3% tax on profits above $250,000. That means a corporation making $260,000 in profits will pay an extra $130 a year. Starting in 2013, the additional tax will drop down to 1%, and will only apply to profits over $10 million.1
An increase in the marginal tax rate by 1.8% for couples making more than $250,000.
This means a couple making $260,000 in taxable income will pay an extra $180. The tax rate on income over $250,000 for individuals and $500,000 for couples will increase by 2%. These new rates only apply to income above those levels. They are in effect until 2011—in 2012, the rate increase drops to 0.9%.1
These tax increases will have no impact on 97.5% of individual taxpayers.1
Use these easy-to-read flowcharts to determine which Oregonians pay more under Measure 66, and which businesses will pay tax under Measure 67.
If passed, how will the tax increases affect businesses and the economy?
A recent report issued by the nonpartisan Legislative Revenue Office shows that if the tax increases are approved, Oregon’s economy will actually be better off than if state government cuts spending by that amount to balance its budget.2 According to Legislative Revenue Officer Paul Warner, a state government “spending decrease has a larger negative impact on the economy than a tax increase does.”3
88% of businesses in Oregon will pay only $150. Oregon's businesses taxes will still be the fifth lowest in the country.
Bad schools equal bad business. Investing in education is key to economic recovery and Oregon’s long-term economic health. Every dollar invested in public education returns $9 to the community.4
NEW! A recent OSU study shows Oregon's taxes, even WITH these increases, are still below the national average. OSU economist William Jaeger says there is "no reason to believe that these tax increases on the wealthiest sector would make Oregon less competitive." Read more.
How do our corporate taxes compare to other states?
Prior to passage of these measures, Oregon had the third lowest corporate income taxes in the nation, and the lowest corporate taxes on the West Coast. Under the new plan, Oregon will still have the fifth lowest corporate taxes in the nation.5 Washington’s Business & Occupation tax, at 0.47%, is almost 5 times higher than Oregon’s new corporate minimum tax, at 0.1% of Oregon sales, and has no upper limit on what corporations pay.1
Sources:
- Defend Oregon, http://defendoregon.org/thefacts.html.
- "Referendum 301 & 302 Revenue Measures," Research Report #6-09, Legislative Revenue Office, 2009.
- The Register-Guard, “Tax increases would help state economy more than cuts, report finds,” 10/1/09
- "K-12 Spending and the Oregon Economy," ECONorthwest, 2002.
- The Oregonian, “A plea for accuracy in war of words over taxes,” 10/10/09.