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My View: Tax policy should focus on fairness

Beware when Big Business says it wants to help low-income people


At the recent Oregon Leadership Summit, the state’s business interests voiced concerns about low-income Oregonians being taxed too much.

Be careful about the crocodile tears coming from the business lobby in the Salem Puzzle Palace. Even if we eliminated all income taxes on Oregonians who live below the poverty line — 17.2 percent of us — this won’t solve the problem. But it does provide “cover” for big businesses that don’t pay their fair share of taxes.

Oregonians, a job loss or health care crisis away from homelessness, will need help via food stamps (which are being cut), housing vouchers (which are being cut) and human services (which are being cut). Without moving these Oregonians into family-wage jobs, a tax plan alone will not do the job.

What would be helpful is for corporate Oregon to train future workers via apprenticeships instead of leaving this up to an already overburdened education system. Would-be workers are an investment. Why should the public pay for such an investment?

The same goes for getting corporate Oregon to subsidize work force housing for its employees near their places of work. But the business lobby in Oregon refuses to step up to such responsibilities.

In the late 1990s, the business lobby got the Legislature to tax only the percentage of sales being done in Oregon for apportioning U.S. profits to the state. By no longer taking into account the share of their property or payroll in the state — as had been done in the past to determine the share of U.S. profits that were subject to Oregon taxes — corporations such as Intel and Nike pay only a minimum tax.

Before this change in tax law, Intel — the state’s largest employer — paid $50 million per year in income taxes. Now it pays next to nothing: around $150 per year (Editor's note: Intel has declined to provide information about how much it actually pays in taxes).

If we don’t tax people below the poverty line, which we shouldn’t, and we don’t tax “traded sector” corporations that get huge subsidies via the Strategic Investment Program (Intel gets the most), then who is left to pay local property taxes and Oregon’s income tax to support a high-quality education system and other public investments?

You know, the rest of us little people. And since the middle class and small businesses are being squeezed, there is less and less to tax.

So where does Gov. John Kitzhaber and the business lobby propose Oregon get more money for funding early childhood education, K-12, community colleges and higher education? When you hold firms such as Intel and Nike harmless for 30 years with a “no new taxes” pledge, you have limited options: make government more efficient, create more jobs and with it more taxpayers, or get Oregonians to vote for a sales tax.

Everyone is for efficiency, but the reality is that since the passage of Measure 5 in 1990, we have been there and done that at the cost of low-income Oregonians. Drawing more high-paid outsiders to Oregon increases the demand for new services such as schools and roads, which erase any savings we would get from the increased income taxes they pay. And the sales tax will be dead on arrival. So what to do?

Kitzhaber is boxed in by his own tax giveaways to Intel and Nike. It’s not about “no new taxes,” but “tax fairness.”

Russ Dondero is professor emeritus of the Department of Politics and Government at Pacific University in Forest Grove.