Today was a Billion Dollar Tax Day in the Oregon Legislature

Democrats pass $733 million in tax increases on small and family owned businesses

            Salem, OR – On a strictly partisan vote Thursday, Democrats passed two tax bills that will extract $733 million from Oregon small and family owned businesses over the next two years. By the end today, the Senate will vote on more than one billion dollars in new taxes, all targeted at Oregon small and family businesses, despite a second-highest in the nation unemployment rate. 

            “These taxes will undermine the small businesses that create jobs and help communities around Oregon thrive,” said Senator Chris Telfer (R-Bend).  “A report released today stated that over the next six years, Oregon will lose 36,000 additional jobs because of these tax increases.  These tax increases take our state in exactly the wrong direction.” 

            According to state officials, 75% of the individuals targeted in just one of the adopted tax increases are small and family business owners.  Republicans pointed out that in addition to the immediate loss of jobs, these tax increases will drive business owners to other states over the long term.  The two tax bills are:

• HB 3405 A – Increases the tax on Oregon businesses for the “privilege” of doing business in Oregon from $10 to up to $100,000 and increases the overall tax rate on Oregon corporations.  Total raised: $261 million.
   
• HB 2649 A – Creates two brand new, highest-in-the-nation tax brackets at 10.8% and 11%.  More than 75% of the individuals paying this tax will be small and family owned businesses.  Total raised: $472 million.

            Both bills passed on strict party lines, 18 to 12. 

            “Democrats are turning a tin ear to Oregon's struggling economy,” said Senator Jeff Kruse (R-Roseburg). “Higher taxes mean employers will be forced to cut jobs.  The tragedy is, we don’t need tax increases to pay for the services that matter most to Oregonians!”

            Republicans proposed a Back to Basics Budget in May that outlines a way to pay for Oregon’s most important priorities without increasing taxes. 

            “We can't tax our way to prosperity,” said Senator Brian Boquist (R-Dallas). “It's time for state government to live within its means, tighten its belt, and fund the most critical services with existing tax revenue. Oregonians and businesses are being forced to cut spending- Salem should do the same.”

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Democrats levy $90 million tax on small, family owned businesses to reform health care, protect special interests

            Salem, OR – As Oregon wrestles with record unemployment, Senate Democrats passed a health care premium tax on Thursday that protects labor unions and large corporations at the expense of individual payers and small businesses, the backbone of Oregon’s economy.

            “Increasing access to health care for all Oregonians is a noble and laudable goal that we all share,” said Senator Larry George (R-Sherwood).  “But small businesses are the life and breath of our economy, and this tax will make already expensive health insurance even more unaffordable for them.  For all the talk about ‘fairness’ in this building, this tax is boldly unfair.  This premium tax exempts the biggest, wealthiest and most powerful entities and saddles the most vulnerable businesses with the cost of the uninsured.”

            The proposed 1% tax on health care premiums contained in House Bill 2116 is not a long-term, workable solution.  Over time, this tax will fail to pay for the program it supports. The premium tax unfairly targets small businesses while exempting self-insured entities such as large companies and labor trusts.  The tax would extract $90 million from individual payers and family businesses over the next two years.  The State of Oregon, the largest purchaser of health care coverage in Oregon, would eventually be exempted from the 1% tax and subject only to an undetermined assessment amount. 

            “If we are going to find a solution, it should be a solution to which everyone contributes, not just small businesses and individual payers,” said Senator Jeff Kruse (R-Roseburg).  “State government, big businesses and labor unions should contribute just as much as the hardware store down the street.” 

            Republicans also cautioned that the timing of the program expansion is flawed, noting that a recession when the state is racked by budget shortfalls is the wrong time to increase spending. 

            Oregon’s unemployment rate is the second highest in the nation.  More than 260,000 Oregonians can not find a job, much less afford healthcare. 

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