PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

In the States: Oregon Has Issues, and They Might Be Getting Worse

By at 18 December, 2018, 1:15 pm

by Raymond J. Keating-

Small Business Policy Index 2018: Oregon ranked 42nd among the 50 states.

SBE Council’s “Small Business Policy Index 2018” ranks the 50 states according to 55 different policy measures, including a wide array of tax, regulatory and government spending and performance measurements.

Small Business Tax Index 2017: Oregon ranked 42nd among the 50 states.

SBE Council’s “Small Business Tax Index 2017” ranks the states according to 26 different tax measures. Among the taxes included are income, capital gains, property, death, unemployment, and various consumption-based taxes, including state gas and diesel levies.

When it comes to burdening entrepreneurs, small businesses and investors with substantial costs, Oregon has some issues. And unfortunately, those issues might get worse in 2019.

On the Small Business Policy Index 2018: Ranking the States on Policy Measures and Costs Impacting Small Business and Entrepreneurship, which I write for SBE Council, Oregon ranked 42nd, or ninth worst, in terms of its policy climate for entrepreneurship and small business. While Oregon does have some positives working in its favor, such as the lowest consumption-based taxes, relatively low workers’ compensation costs, and a fairly low level of state and local government workers, any plusses are vastly outweighed by assorted negatives.

Those policy negatives include very high personal income and individual capital gains taxes; high corporate income and capital gains taxes; a fairly high state and local government spending level; a high energy regulation burden; and high gas, diesel and unemployment taxes.

Unfortunately, at the ballot box in November, voters rejected a couple of measures that would have improved matters, namely, voting against Measure 103, which called for a state constitutional amendment prohibiting state and local government from imposing taxes on the sale or distribution of groceries, and against Measure 104, which would have amended the state constitution to basically clarify what the current constitutional requirement for a 3/5 super majority vote to raise revenue means.

Now, according to a December 14th OregonLive.com report, state lawmakers are looking to inflict additional costs.  Consider the following:

• “Democrats in the Oregon Legislature are gearing up to raise billions of dollars in taxes next year to boost school spending and cover ballooning public pension costs.”

• “The House Revenue committee introduced more than 50 proposals on Wednesday and the Senate Finance and Revenue committee introduced more than 30 tax bills on Friday.”

• “A new business tax favored by Democrats, public employee unions and some businesses as a way to raise money for education is still being worked out behind-the-scenes. It would likely be a gross receipts tax calculated on a company’s sales, or a business activity tax that can be calculated in a variety of ways.”

• One group “is pushing for a variety of changes in 2019, including changes to commercial and industrial property taxes that would result in a net increase in revenue for the state.”

• “Lawmakers are looking at a variety of proposals to raise Oregon’s corporate income taxes. Some bills target the state’s corporate minimum tax, for example, by adding more minimum tax brackets or changing the top tier from a set dollar amount to a percentage of a company’s sales. Another would increase the corporate income tax rates.”

The list seems endless. In the end, state lawmakers pushing this radical tax agenda seem bent on chasing entrepreneurs, businesses and economic opportunity out of Oregon. The necessary policy agenda for Oregon is to provide tax and regulatory relief, yet the state appears intent on going further in the opposite direction.

If you think Oregon has issues now, just wait.

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Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.

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