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Our Opinion: Measure 97 is based on deceptions

Supporters of Measure 97 — a massive corporate sales tax on the November ballot — have pushed two deceptive arguments to try to persuade Oregon voters that they magically won’t be hurt by what would be the largest tax increase in the state’s history.

The first misleading claim is that the $6.1 billion per-biennium tax won’t be passed along to consumers. The second is that the tax really isn’t going to harm Oregon-based businesses, because it will be paid primarily by corporations with headquarters outside the state.

Unfortunately for the Measure 97 campaign — but to the benefit of voters who want to be fully informed — those two deceptions are rapidly coming unraveled.

The idea that average Oregonians will not have to pay a large portion of the tax was debunked by none other than Gov. Kate Brown, who has come out in favor of Measure 97. In an interview with Oregon Public Broadcasting, Brown made the obvious observation that “Oregonians are smart enough to realize there will be, um, they will bear some of these increased costs.”

Soon after making that unremarkable statement, Brown felt the wrath of the pro-97 forces, and she was compelled to send out a clarifying email to the news media. In reality, though, the governor understated Measure 97’s potential effects on Oregon households. The nonpartisan Legislative Revenue Office has analyzed the ballot measure and projected that $4 billion of this $6.1 billion tax would be borne by Oregon families in the form of higher prices or reduced income.

To argue otherwise is just a form of trickery.

The same can be said about the claim that Oregon-based businesses won’t be harmed. Among the companies that have publicly stated they will be damaged by Measure 97 are iconic Oregon businesses such as Powell’s Books and Tillamook Creamery, and important health-care groups like the Oregon Clinic. These companies are loath to get involved with politics, but Measure 97 poses a threat so dire that they’ve been forced into the fight.

The dramatic effect on the Oregon Clinic was highlighted in a Sept. 1 Portland Tribune article detailing how the health-care provider would pay an additional $4.2 million in taxes while clinics that have a different corporate structure would see no direct tax increase at all. Measure 97 would have an uneven — and unfair — effect on hospitals and clinics, but the bottom line, according to the Legislative Revenue Office, is that it would increase health-care taxes by more than $100 million a year.

All businesses in Oregon, in fact, will see their costs increased if Measure 97 — which would impose a 2.5 percent gross receipts tax on sales above $25 million for certain corporations — is approved. That’s because their supplies and services, including electricity and other utilities, will go up in price. Since the tax envisioned by Measure 97 is applied throughout the supply chain, the end effect for both businesses and consumers could far exceed 2.5 percent.

Supporters of Measure 97 have tried to depict it as a tax that applies “only to 1,000 corporations.” What they don’t tell you is that those businesses account for 88 percent of the corporate retail sales in Oregon. Think about how many locations Fred Meyer, Safeway, Walgreens, Target, Walmart or similar companies have across the state and you will begin to understand it’s not just 1,000 companies — it’s tens of thousands of stores.

In other words, the tax will apply to the products that people buy every day. That makes this a sales tax — except sales taxes in other states usually exclude the essential items that Measure 97 would tax the most.

Measure 97 is before voters now because the governor and Legislature failed to do their jobs. They could have come up with reasonable proposals to increase revenues and support education and other services. Because they didn’t do that, too many public officials are trying to hide their shortcomings behind a poorly written measure that’s riddled with unintended consequences.

We hope Brown is correct — and that Oregonians are smart enough to see this proposal for what it truly is.

— Pamplin Media Group