Woah. File under “I did NOT see THIS coming.” The Oregonian editorial board penned a lengthy endorsement yesterday advising its readers to vote against the legislature’s modest tax hikes on corporations and those earning more than $250,000 a year. The strongly-worded piece, which reads more like a press release put out by the Portland Business Alliance than reasoned opinion, hits out at the Democratic legislature for “making an enemy of business” with the move:
This is ugly stuff, at an especially ugly time in Oregon. People are suffering, business is hurting, plunging tax revenues have ripped a $727 million hole in the state budget. There were, of course, no easy, pain-free and non-controversial ways for the Legislature to fill that hole and protect schools, public safety and other essential services.
But there were, and still are, better ways than Measures 66 and 67.
The tax hikes are “ill-timed,” write the board. The legislature “can do better,” and “lawmakers can work closely with business to craft a careful, responsible increase in corporate taxes.” The rhetoric is eerily reminiscent of the lines employed on the national level by the health insurance lobby against health reform: We should wait. We can do it better. This isn’t the right time. You get the idea. Then there’s this line:
It doesn’t have to replace the absurdly low $10 minimum corporate tax with a new scheme that would force businesses with high sales volumes but no profits to pay up to $100,000 a year in minimum taxes even as they fight to cut their losses and hold on to as many jobs as they can.
But it’s not that simple.
“A company has to have $100million in Oregon sales in order for that to be the case, so these are not small businesses that will be paying under these measures,” says Scott Moore, communications director with the Yes For Oregon campaign—a union-backed coalition pushing the yes vote. “There are 104 of those businesses in Oregon that are just paying the $10 minimum right now. 77 of those are headquartered out of state. Measure 67 finally requires large out of state corporations to pay more than $10 per year to do business in Oregon.”
97.5 percent of the businesses in Oregon will pay either $150 or they won’t pay any more than they pay today, under the new measure, says Moore. The measures protect schools funding, public safety, and senior services.
Oddly, the bOard agrees that there will be deep cuts if the measures fail, and that the chances of any second tax package passing in February are non-existent, yet they still think voters should say no just because, what? Because the legislature was mean to the corporate lobbyists who fought the move?
Worse still, the editorial is downright hypocritical when you read what the Odious ones wrote just 10 months ago about raising the beer tax. After talking about how the beer tax is modest and long-needed (sound familiar?), they spout this gem:
“Oregon’s beverage industry will do what it always does: unleash its lobbyists in Salem, leverage the access it buys with hundreds of thousands of dollars in campaign contributions every election and put on its best public face, trotting out appealing Oregon beermakers such as Kurt Widmer of Widmer Brothers and Gary Fish of Deschutes Brewery. You’ll never see executives of Anheuser-Busch-Inbev. Instead, you’ll see Widmer offering his back-of-the-bar-napkin math, arguing that a 15-cent per pint tax increase actually would lead to a price increase of up to $1.50 a glass, once everybody in the beer supply chain is done taking his or her cut.”
Sound familiar again? Just like “you’ll never see executives of Sprint or Bank of America or Merill Lynch, instead you’ll see a Tillamook dairy farmer, offering her back-of-the-napkin math arguing that $150 is going to close down her farm.” Actual quote:
“There is a better, more responsible way: The beer industry could use its expertise to help lawmakers craft a modest and fair tax increase — even one that left Oregon’s tax in the bottom third of state beer taxes — dedicate the revenue to alcohol treatment and wipe this issue off the table, once and for all.”
I mean, wow. The hypocrisy. When the beer lobby opposes raising a tax on beer drinkers, they’re lambasted as being obstructionist, pig-bellied lobbyists who will stoop to any low to block the tax increase. But corporate lobbyists oppose modest taxes on corporations and the rich, it’s those evil Democrats’ fault for not bowing to their every wish?
Steve Novick, who is also working to get the measures approved, describes the Oxy-morons as “in an abusive relationship” with corporate lobbyists in a post on Blue Oregon this morning. On December 30, his yes campaign released poll data showing voters are leaning toward the measures by a 17-point margin.
Our endorsement interviews on the measures are scheduled for later this week. There’s also a City Club forum on Friday, January 8, scheduled for 12:15, between Novick and Pat McCormick, who is pushing the no vote. It promises to be fascinating, and we’ll have a round-up here.
Meanwhile, Moore suggests three things you can do if you’re frustrated with the endOrsement: 1.Volunteer to knock on doors or make phone calls to get supporters out to vote. 2. Donate some money to help the Yes campaign talk to undecided voters. 3.Write a letter to the editor.
Meanwhile if you’re on the other side of the fence, Erica Hagedorn with the No campaign has some tips for you. 1.Donate! 2.Read media clippings! 3.Get involved!
I agree with your bottom line Matt, and will vote for this tax.
But it’s highly ironic for anyone even remotely associated with the Mercury to criticize another paper for taking an editorial stance. The Mercury is ALL editorial content. This blog post for instance….
@Blabby Once again: Our stance on journalistic objectivity is that it’s a pretense generally adopted by rich white powerful men in America. At the Mercury we strive to be fair and accurate, and up-front with our own biases.
Going home this Christmas to England, I was trying to explain the idea to friends. They said it was “ridiculous.” In the UK, if you lean right, you read the Daily Mail or the Telegraph. If you lean left, you read the Guardian. Same news, different slant. Better papers, though, I’d argue, than most we have over here.
Also: A local Democratic party precinct is organizing another public forum on the measures this Saturday, 10AM at Friendly House (1737 NW 26th). Senator Suzanne Bonamici and Rep Mitch Greenlick will be there for the discussion.
Once AGAIN you are showing your libera tax and spend bias Matt. If you want to writie opinions become an opinion writer. You are a NEWS writer, report the news and don’t slant it.
You also need to get your facts straight as you are just like everyone else who supports these tax increases- all your info is WRONG!
It would be amusing to see an Oregon voter that understands economics.
Read this very, very slowly and try to comprehend people:
The “rich” do not pay these taxes. They raise prices and slash jobs. So in reality YOU pay the taxes.
Government pensioners and unions sometimes can figure this out on their own, but they won’t tell you that since they’re the ones getting your cash.
Hehe. Nice article. I’ll be voting Yes.
@D: It’s a good but often forgotten point; it’s like when someone wins a big settlement against, say, Verizon. They haven’t “stuck it to the man”, they’ve just made the man get more creative with his accounting.
Personally, I’m still undecided on either measure. :
It is in the Oregonian’s economic interest for the measures to fail because,
1. There will be sensational news coverage of the impact of the cuts, selling marginally more papers;
2. The followon campaigns to fill the budget gap and opposition to them will generate more ad revenue, and 3. perhaps they will have to pay more corporate tax.
D knows the score.
Matt, I’d also point out that the conclusions of the two editorials you are contrasting are basically the same: the group to be taxed should sit down with the legislature and come up with something more modest.
tk, my two cents: I’m voting for the business tax because it hasn’t been raised since 1931 and is, in fact, ridiculously low.
I’m not voting for the income tax. Most people earning that much are small business owners or otherwise in the position to employ people. Ironically, hitting these people in the pocket book with an income tax will likely have a greater negative impact on employment then the direct business tax.
As has been noted on Blogtown and elsewhere, our job market sucks, and at some point we have to get serious about making it better.
@Blabby: Thanks for the insight. I was leaning against “no” on the income tax because, although the carrot of “no taxes on unenjoyment” sounds useful for people, we already have incredibly high income taxes and taxes rarely get removed or reduced. Sure, I don’t make $250k+ now but, you know, I’d like to…
I would love your suggestions for questions for both sides during our endorsement interviews this week…
Well except for your added comment – I’d say the trip to the UK served you well to rebirth your journalist skills. How long will it take before you are the wayward child? It is a good article.
Matt, thank you for the offer. I think my question for proponents would be:
It seems to a lifetime Oregonian like the state budget is perpetually in crisis, particularly school funding, and we are regularly told that the “end is near.” What is it about these tax increases which will prevent a budget crisis from looming again in a few years? If that happens will you advocate more tax increases?
I know it’s a common name, but is the Scott Moore of the Yes For Oregon campaign the same Scott Moore that writes/wrote here on Blogtown? And if so, wouldn’t that be worth mentioning, since we’re talking of journalistic ethics type stuff?
I know my understanding of the topic is very simplistic, but I’ve always thought that – in general, you don’t want to tax corporations. That profit becomes income for the employees and the shareholders – who are already being taxed on their income. Any profit left over after those payouts is used to grow the business. By taxing the corporation itself, you’re in effect double-taxing the actual people involved, and reducing the company’s ability to reinvest and do better than next year.
Saying “Company C earned $100 million last year and only paid $10 in taxes!” is very misleading. That profit went to it’s shareholders, who were taxed on it, individually.
@CH: Scott used to have my job. Yes. But we went ON and ON about this, doing full disclosures for the first year after he left. It’s been two years now, at least, and everyone’s written for the Mercury at some point.
FULL DISCLOSURE: Michael Jackson was once a Mercury intern.
Etcetera. Gets a bit “same” after a while. You know?
Fair enough, though in this case, since the jab “reads more like a press release put out by the Portland Business Alliance” makes an appearance, it’s probably fair to remind the reader of your own conflict of interest.
I’ll be voting “yes” on both measures, btw.
Reymont – there’s one bit missing from your case there. Many (most?) of the companies that will be affected by the tax increase aren’t Oregon-only companies. The profits they make become income for their shareholders and employees, and if those shareholders happen to be Oregonian then the state gets the money anyway via personal taxes. So for those people your argument holds true. But if you don’t tax the corporations doing business here, the money ends up in the pockets of people the state can’t get at. And the net result is that we all end up paying to subsidize the quality of life in the Virgin Islands, and places like that.
A fair tax policy has a balance. You can argue all day about where the right balance is (and economists do…), but putting all the burden onto one form of tax makes no sense. It would be like relying solely on business taxes to fund public transit, or relying solely on income taxes with no sales tax, and we’d never do something as ridiculous as that…
Regarding slashed jobs:
In Multnomah County alone, this measure determines how many K-12 school staff, social workers, PSU and PCC staff, correctional facility staff, and many other state employees get to keep their jobs. (http://voteyesfororegon.org/map/multnomah.…)
As a teacher entering the job market, I would just LOVE it if 66 and 67 passed.
I also agree that as a lifetime Oregonian, we do seem to constantly struggle with school funding. Lots of programs face the chopping block again and again. What is it about these taxes that will prevent another budget crisis?
It’s true, it won’t fix a systematic undervaluing of public education or the state’s reliance on revenue from a boom-bust economy.
However, I’m seeing a general refusal to change a 79-year-old $10 corporate tax because some citizens don’t want to set a precedent for tax increases. That refusal is not going to assuage any budget crisis, now or ever.
If the measures fail – congratulations: You will have really stood up to state government. You will have really shown them. And as you do so, our state’s children, seniors, and any citizens who benefit from public safety and healthcare will find themselves dealing with the consequences.
Why is the repeated phrase “taxes on corporations and the rich”? This seems to conflate two issues.
Most people agree that progressive income taxes make sense. But Matt doesn’t seem to rebut the O’s point, even though he quotes it: that taxing gross revenue (as opposed to net profit) is dumb and regressive.
Taxing a high-volume business that doesn’t make much profit only adds to the price of doing that business. This makes it a regressive tax.
Doesn’t it?
The “don’t tax the people that create the jobs” argument falls flat: Who are we going to tax instead? The people who get the jobs? Won’t they just ask the for more money from the people that create the jobs, resulting in, “no difference at all.”
No, it doesn’t, but to understand why, you have to understand why taxing the rich doesn’t cause job losses in the first place. If you don’t understand that, then you need to come up with a different explanation as to why it isn’t the same thing…
I suspect that the real reason that most people are opposed to these are because they are opposed to taxes in general. I don’t know if they don’t realize that taxes pay for things, or if they do realize that, and they actually want to privatize everything, (like some IMF structured refinance in a third world country: That tends to end up very badly for 99.9% of the population, and the other 0.1% need bodyguards and armored cars so they don’t get much out of the deal either.)
@Matthew D: Won’t they just ask for more money, no matter what?
I don’t think that most people are opposed to taxes in general. I think that most people believe that 30% of their income is *enough* to pay in taxes, and they see the government as a mismanaged, bloated bureaucratic structure that’s never going to want *less* tax, only more.
@michaelanderson nearly every corporation manages their money so as to report as little profit as possible IN ORDER TO AVOID PAYING TAXES
@michaelanderson > corporations manage their money, and accounting, so as to minimize taxable profits
Matthew D, I’m not opposed to paying some taxes and I’m not opposed to government being involved in many things.
But as you get older, you realize that the government NEVER has enough money. In the best of times, in the greatest of boom years, ask a teacher if schools have enough money. Ask a social worker if their agency has enough money. Ask the city if its doing as much planning as it would like, has large enough road crews.
How much is too much to spend on our kids? Or the elderly? The answer is that there is literally never enough. But we can’t literally tax people at 100%.
This is some economics, but easy enough: government jobs are not actually part of the “productive” economy. I don’t say that to hurt feelings or devalue govt workers and the hard jobs and long hours they work. Really, I don’t.
But these jobs are funded by taxing the economic activities of the private sector. The economic activities of the private sector have to be productive enough, and generate enough revenue to pay for itself, AND pay for the operation of public sector. The public sector doesn’t generate revenues. It consumes revenues.
These measures will likely pass. But I encourage all of you to pay attention, and watch for the next time that the state and schools are in a dire, “once in a generation” crisis. It will likely happen again within the next five-to-seven years. It’s always been like that here.
@Blabby: One of my favorite versions of the “boy who cried wolf” tale was the one that involved dire ballot measures in Multnomah in 2002-3, without which, to hear it told, countless firemen, policemen, and teachers would be without jobs. The measure did not pass, but they miraculously they found the funds and didn’t have to make any staff cuts.
@MichaelAndersen: No. It makes it a way to tax corporations that pay high priced accountants to hide their profits as expenses, like the cost of high priced accountants.