The governor says the proposal to write nearly every Oregonian a $750 check would “punch a huge hole in the state budget.”
Gov. Tina Kotek tells WW that she’s against Initiative Petition 17, the November ballot measure that would raise corporate taxes about $7 billion a year through a new gross receipts tax and use the proceeds to send nearly every Oregonian a $750 check.
“I am opposed to this ballot measure,” Kotek says. “It may look good on paper, but its flawed approach would punch a huge hole in the state budget and put essential services for low-wage and working families at risk.”
In an interview last week, Antonio Gisbert, chief petitioner for the measure, which is almost entirely funded by California money, said he hoped progressives would support the measure, which includes two concepts—the redistribution of wealth and a form of universal income—that many left-leaning voters may find attractive. (The Secretary of State’s Office certified IP 17 on July 24, which means it will be on the November ballot.)
But as Kotek notes, the practical impacts of the measure would be negative for state government. An updated fiscal analysis released last week found that, despite increasing taxes significantly, the initiative would actually reduce the amount available to the general fund for K-12 education, health care and human services.
“The increase in this tax [on corporations] will reduce the availability of general fund resources due to its interactions with existing tax and transfer programs,” the analysis stated. “Based on the updated information and committee discussion, the 2025-27 impact is $0.4 billion.”
Corporations have a different concern: They already pay taxes on profits and gross receipts (effectively, sales attributable to Oregon), making Oregon one of only two states that impose both kinds of taxes on companies (Delaware is the other).
In an earlier report on IP 17, the Tax Foundation, a Washington, D.C., think tank, noted that Oregon already has “one of the highest business tax burdens in the country” because of the combination of taxes on profits and sales and the overlay of local taxes, such as local business license taxes and Metro’s supportive housing services tax. For corporations in the metro area, the Tax Foundation notes, that mix results in “a combined state-local tax of 14.2 percent on corporate net income, plus a 0.57 percent tax on gross receipts.”
Last year, Kotek recognized the tax burden as an impediment to the region and state’s economic recovery and encouraged local leaders not to seek any new taxes for the next three years, even for housing. Her opposition to IP 17 reinforces that position.
By: Nigel Jaquiss
View original article: https://www.wweek.com/news/2024/07/30/kotek-pans-initiative-petition-17-which-would-raise-corporate-taxes/