It’s no secret. Oregon is desperate for money. The state economist is predicting a three billion dollar shortfall in the budget for the next two years. Before they’d finished re-balancing the budget for the rest of this fiscal year, lawmakers were already looking at a whole raft of potential ways to raise money. Cigarettes, beer, the corporate minimum tax, personal income taxes, bicycles, hospitals — anything seen as potentially bringing in revenue is on the legislative table
In the first installment of our look at taxes, we’ll focus on proposals to increase the beer tax and end the $10 corporate minimum tax.
A proposed hike in the beer tax is sudsing up a brawl and tea party satire. The bill directs the estimated $300 million it would raise to prevention and treatment of substance abuse. Brewers say a homegrown Oregon industry would be hurt more than the revenues raised are worth. They also say that, because of the distribution system, the almost $50-a-barrel tax hike will really mean $1.50 more for a pint. Bill supporters dispute that, and say low funding for abuse programs already hurts real people with real addictions.
It’s harder to find the real people in the debate over Oregon’s corporate minimum tax, but raising it has long been on the Democratic agenda. Here’s the history: back in 1929, the state first imposed a minimum of $25 on corporations doing business in Oregon. That was dropped to $10 in 1931, and there it has stayed.
Advocates for an increase say it’s unfair that about two thirds of the C corporations in Oregon pay only the $10 minimum. (This only applies to the state’s thirty-some thousand C corporations, which are generally larger than S Corporations or LLCs.) The business community is tired of the fight and is now generally on board for some kind of modernization. The question is what. Business groups want just a higher flat fee. But one bill proposes a tax based roughly on “value added.” Another would base a stair step of tax increases on companies’ gross sales receipts.
In the coming weeks we’ll look at more of the legislature’s efforts to raise revenue, including kicker reform and a wholesale revision of Oregon’s tax system. You can leave your suggestions on our blog. For today — do you drink beer? Do you make it? How will an increase in the price affect you? Have you ever participated in state-funded addiction treatments? How did that affect you?
Or do you run a business? How much income tax do you pay? How would the different proposed hikes affect you?
- Stephanie Soares Pump: Chair, Governor’s Council on Alcohol and Drug Abuse Programs
- Irene Firmat: Founder and CEO, Full Sail Brewing Company
- Ben Cannon: State Representative for Oregon’s 46th District; main sponsor of the bill to raise beer taxes.
- Chuck Sheketoff: Executive Director, Oregon Center for Public Policy
- John Marshall: Tax and fiscal policy consultant for Associated Oregon Industries