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Press Release

    More on Taxes in Oregon

    03/06/2007

    The State of Oregon this budget cycle has a 20% increase in General funds and a six billion dollar increase in the all funds budget.  The all funds budget this year will grow to more than 49 billion dollars as compared to 1990 when the State had a 15 billion dollar all funds budget.  That is more than a 200% increase in the past 17 years.

    Less than two months into session and Oregon Legislators have already agreed to raise taxes by more than 500 million dollars (the bi-partisan negotiated settlement on HB2707).  Here is a short list of some of the tax proposals before the 2007 Oregon Legislature.

    It’s actually quite simple to determine if a tax policy is a tax increase.  Legislators should ask themselves; does this increase the net tax burden on Oregon Businesses or individuals?  If it does, it’s a tax increase.  Therefore FreedomWorks considers a raid on the Kicker and increased fees to qualify as tax increases.

    FreedomWorks encourages the debate about tax reform including our support of tax reductions to Oregon families and businesses.  Moreover we continue to support a reduction and/or elimination of the capital gains and death taxes.  To that ends FreedomWorks has submitted through the offices of State Senators Larry and Gary George a series of tax reduction bills.  Bills that if passed would help stimulate Oregon’s economy and provide Oregonians with the freedom they need to be Captains of their own economic destiny.

    HB2707, the “Kicker Raid”

    The Corporate Kicker is a constitutionally mandated tax refund.

  • The Kicker Raid will take a minimum of 240 million dollars out of the pockets of hard working Oregon Businesses and put that money in the pocket of an out of control spending bureaucracy.
  • With 2 billion dollars in excess collected taxes the State needs no more money to fund its core functions.
  • The Corporate Kicker impacts all Oregonians, when businesses profit they have more money to hire new employees and expand their operations.  Moreover they spend money in the communities where they live and operate.  We need more economic activity in Oregon; sending money to the State so it can be inefficiently spent is a poor use of capital.
  • Proponents say we must have a “rainy day fund”.  I agree, however with a 2 billion dollar surplus, the legislators should prioritize their spending and create a rainy day fund from existing revenue.
  • The “rainy day fund” is a statutory bill and could be easily accessed by the spending interest in Salem.  A simple majority is required on statutes.
  • There are few safe guards to protect taxpayers from Lawmakers declaring an emergency and accessing the “rainy day fund”, when no real emergency exists.  
  • The Governors budget represents a 20% increase in State spending.  Raising any taxes is unnecessary to meet the needs of the State of Oregon.
  • The negotiated plan exempts most businesses from the raid.
  • S-corps, LLP and other small businesses (corporations) are exempted from the raid, however that still leaves over 1,000 Oregon Businesses that will have their taxes increased if Legislators successfully passed the so called “compromised”.
  • Many C-Corps are small businesses and they will lose their Kicker. 
  • Should the State of Oregon be in the business of picking winners and losers in the economy?  By exempting everyone except C-Corps lawmakers put C-Corps at a disadvantage in the marketplace.
  • Our goal should be to remove barriers in economy not erect new ones; by writing tax code that benefits one type of business over another we create new barriers to competition. 
  • HB 2707 (negotiated settlement), 151 million dollar increase in the “Minimum Tax”

    ·        The Negotiated plan also calls for a higher Minimum tax on Oregon businesses, an additional 151 million dollars. 

    o       Where is the crisis? 

    o       Does the State need to money?

    o       How is this going to help any business in Oregon?

                o       Oregon businesses deserve tax cuts not tax increases.
              

    HB 2201, “Healthy Kids Proposal”, 181.7 million dollar increase in tobacco taxes

  • Governor Ted Kulongoski’s plan is to raise the cigarette tax from $1.18 to $2.02 per pack to provide healthcare for uninsured children.
  • Cigarette taxes are an unstable source of revenue especially as higher prices force smokers to seek cigarettes through cheaper avenues such as Native American reservations, the Internet, or even the black market.
  • This punishes smokers for politician’s bad spending habits.
  • Small business owners that run convenience stores, gas stations, and local bars, wind up getting hit hardest by the tax.
  • Democrats are trying to frame any legislators that oppose this massive tax hike as “voting against kids,” hoping to play politics with this serious issue.
  • The fact is that Oregon has a $2 billion surplus. Oregon has a spending problem, and not a revenue problem.
  • If politicians in Oregon really want to get serious about improving the state’s healthcare system they need to remove the red tape, mandates and big government regulation that is keeping the market from working in this industry. 
  • It is only through market-based reform that patients will be able to benefit from competition and see prices fall.
  • SB 80, the referral to remove the double majority, cost unknown

  • It is a referral that would overturn the requirement for a double-majority of voters to pass a tax increase. 
  • The double majority should be called the 25% rule; because it requires that at least 50% of voters show up on Election Day and that at least half of them or 25% of voters approve of a tax increase before it can be approved. 
  • Overturning the current double-majority voting requirement would make it mush easier for governments and special interest to pass tax increases.
  • Other Taxes Proposed by the 2007 Oregon Legislature

  • SB 366 and HB2525, new taxes on homes, unspecified amount
  • HB 2691, vehicle registration fees (Taxes), unspecified amount
  • HB 2347, new consumer taxes on alcohol, unspecified amount
  • HB 2653, higher gasoline taxes, unspecified amount
  • Provider Tax (renewal) (GRB): $191.4 million
  • Nursing Facilities Provider Tax (renewal) (GRB): $40.4 million
  • Auto Insurance Tax (GRB): $25 million
  • HB 2530, a new Sales Tax, the third leg of the stole, $800 million
  • Many, many more new fees…too many to count.
  •  

    Total: $1,629,500,000 dollars or 1.629 billion dollars