PORTLAND, Ore. (KOIN) — A proposed tax increase on big businesses in Oregon could actually cost Oregonians more in the long run.
That’s the conclusion of an analysis done by the non-partisan Legislative Revenue Office. The study says Initiative Petition 28 — which is worded to affect businesses that make $25 million or more in Oregon — would also cost thousands of jobs in the private sector and increase the tax burden on Oregon families by $600 per capita per year.
“We have not found one — and I don’t think we will — find a per-capita tax increase this large that voters have to vote yes or no on,” said Ryan Deckert, the president of the Oregon Business Association.
Legislative Revenue Office
IP-28 would levy a 2.5% tax on businesses’ gross sales over $25 million. Supporters point to the current difference between growth in corporate profits and family income in Oregon. They say it’s time big business takes on its fair share of the tax burden to help pay for education and social services.
Businesses “pay about 46% of this much lower number but then they would pay 79% of this much bigger number,” said Paul Warner with the Legislative Revenue Office.
The report found the gross receipts tax increase, expected to raise $3 billion a year, will cost more than just the big businesses paying for it.
“Consumers aren’t going to pay anything directly. It’ll be absorbed by the corporations, but they will see impacts through the price increases,” he told KOIN 6 News. “We anticipate it will act as a consumption tax.”
IP-28 likely on November 2016 ballot
Warner’s analysis says if IP-28 becomes law it will dampen income, employment and population growth, lead to higher consumer prices and wages, increase the tax burden by about $600 per capita and move Oregon from 28th to the 20th highest-taxes state.
Deckert said this is the “biggest tax change ever in Oregon history, the largest tax increase in the state’s history.”
Warner said it will trickle down to consumers.
“One we can see is through utilities. If they get increase in their gross receipt tax, that will work its way through the system and our retailers and wholesalers,” he said. “We expect those sectors to experience some price increases.”