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Tax initiative wrong remedy, especially for low-income people

There are a lot of good reasons for opposing the huge $6 billion tax measure on the November ballot, but the primary reason I oppose it is simple.

Measure 97 hurts my patients.

When the Oregon Medical Association decided to oppose Measure 97, they expressed similar concerns: “The regressive nature of Measure 97 would mean that our patients, especially those with lower incomes, could face additional barriers to accessing quality care at a reasonable price. The cost of health care is already a great burden on families. We believe Measure 97 would compound the problem.”

Measure 97 imposes a 2.5 percent tax on sales for some businesses in Oregon. Businesses with high-volume sales and low margins — like grocers, pharmacies and medical practices — would be hit most directly.

Because this would be a new tax on gross sales, not profits, businesses would be required to pay the tax on their total revenues, regardless of whether they make any profit.

Last week’s Portland Tribune article (“Measure 97 worries health care providers") hit upon another troubling aspect of Measure 97: It’s arbitrary and unfair. Measure 97 taxes only certain businesses, while competitors selling the same products or offering the same services would not be taxed directly.

According to a recent analysis by ECONorthwest, Oregon-based health care clinics organized as so-called C corporations could see their tax bills jump 21 times higher if Measure 97 passes. Another clinic of the same size providing the same services to the same patient pool that is organized as an S corporation or partnership would not be subject to the $6 billion tax increase under Measure 97.

That’s unfair and violates the basic equity of Oregon tax policy.

The nonpartisan Legislative Revenue Office has estimated Measure 97 will raise health care costs in Oregon by $100 million a year. LRO economists determined that two-thirds of the $6 billion tax will end up being paid by Oregon consumers in the form of higher prices for everyday essentials — not by the C corporations subject to the tax.

That’s certainly true in the case of health care. Nearly all the clinics taxed under Measure 97 operate on a profit margin of less than 2 percent, meaning that paying 2.5 percent in taxes would be impossible. That would leave health care providers with untenable options: pass along increased health care costs to patients, offset the cost increase by reducing the number of Medicaid and Medicare patients the clinic accepts, or reduce the number of health care jobs.

Like most physicians, I have dedicated my life’s work to improving the quality of my patients’ health. Measure 97 makes this significantly more challenging.

Measure 97’s hidden sales tax includes no exemption for medications that I need to prescribe for patients. So, the state makes money every time a patient fills a prescription to treat an illness or maintain their health.

My older patients, typically on fixed budgets, generally need more medications. It is not right that some of my patients would literally have to choose between eating, heating their home, or perhaps not filling a prescription as their only choices on how to make ends meet with the additional hundreds of dollars a year this measure would cost them.

Measure 97 would be damaging to our already fragile and expensive health care system. It’s why hundreds of Oregon physicians are urging a "no" vote on Measure 97.

Dr. Colin Cave is a past president of the Oregon Medical Association.