Sen. Mark Hass blasts corporate tax attack ads as ‘amateur,’ ‘lazy’
Ads from a new business group calling itself Priority Oregon are undermining lawmakers’ efforts to garner business support for a new type of tax on corporations, Senate Revenue Chairman Mark Hass said Friday.
Speaking to The Oregonian/OregonLive editorial board, he also dangled the possibility that, if a corporate tax deal is reached, personal income tax rates for all Oregonians could fall slightly.
Hass, a Beaverton Democrat, is leading a small, bipartisan work group of legislators to tackle business tax reform as the state faces a $1.6 billion budget gap. So far, the group has agreed to float a proposal for a gross receipts tax, also called a corporate activity tax.
Hass said Friday that the tax rate they’ll propose will likely fall between 0.4 percent and 0.7 percent of a business’s Oregon sales above $1 million. The new tax, if approved, would replace the state’s existing corporate income taxes, he said.
In addition, Hass hopes to cut personal income tax rates by half a percent. All told, this plan would add roughly $1 billion to the state’s coffers for the 2019-21 biennium, said Paul Warner, Legislative Revenue Officer.
Because the tax wouldn’t take effect immediately, it would raise significantly less than that for the upcoming 2017-19 budget. Warner did not specify how much the tax could bring in for that period.
Hass said he plans to unveil the group’s plan late this month, after other legislative work groups release plans to reform the public pension system and take other cost-cutting measures.
In the meantime, Hass is consulting with business groups on the tax proposal. In the wake of last year’s hard-fought battle around failed Measure 97, the talks have been difficult, but better than some might think, he said.
What’s next after Measure 97?
Many heavy-hitters in the business community have been open to talking taxes, he said, especially with the promise of imminent measures to curb costs. The exception, he said: the “dark money group” behind the new ads.
Priority Oregon is a coalition led by Erica Hetfeld-Hagedorn, the same woman behind Grow Oregon, a group that helped defeat Measure 97. The new coalition includes the Oregon Small Business Association and the Taxpayers Association of Oregon, and it’s linked to Entek, a multinational battery parts manufacturer based in Lebanon.
Because Priority Oregon is organized as a 501(c)4 “social welfare organization,” it is not required to disclose donors.
Hass said the coalition’s ads are threatening his work group’s ability to talk with the business community and reach a compromise on the tax proposal.
“Shadowy groups like this that try to interfere with our government or our political process? I don’t think Oregonians like that,” he said.
The group ran its first ads on Wednesday, likening any gross receipts tax proposal to a sales tax.
Former Rep. John Davis, the group’s spokesman, said its effort is important because the taxes could increase prices on everyday goods.
“It acts like a hidden sales tax on consumers,” he wrote in an email to The Oregonian/OregonLive. ”
Davis said gross receipts taxes are especially hard on low- and fixed-income residents, as well as companies operating at a loss, like start-ups.
Hass called the ads “amateur-ish” and said the sales tax argument is a lazy one over-used by opponents of taxes proposed in Oregon.
At its core, any tax on a business, whether it be a tax on sales or profits or even a property tax, is another expense, Hass said. And all business expenses put pressure on prices, he said.
In its analysis of the effects of the tax proposed in Measure 97, the Legislative Revenue Office found that 50 percent of the tax would be passed on to consumers via higher prices.
Hass said he was disappointed that Priority Oregon and the Oregon Business Plan Coalition are rejecting the new business tax before a proposal is officially released. Coalition partner Sandra McDonough, of the Portland Business Alliance, told The Oregonian/OregonLive last week that “the water’s been poisoned” around gross receipts taxes, thanks to Measure 97.
That kind of language is counter-productive, Hass said. Instead, he’d rather have a conversation about the tax rate or the types of spending cuts they’d like to see, he said.
Hass often points to the volatility of the state’s income tax revenues when talking tax reform. If neither a gross receipts tax nor a sales tax is an option, he asked, then what’s left?
— Anna Marum
Posted on April 8, 2017