Editorial: Proposed state tax measure is no good
The Bulletin, May 5, 2017
Oregon prides itself on being innovative. Perhaps most notably, we were the first state in modern times to require a deposit on soda bottles and the like, and the first to adopt a statewide system of land use planning. We cherish our reputation for innovation.
Except, apparently, where taxes are concerned.
How else to explain Democratic lawmakers’ delight in a tax “reform” scheme put forward by Sen. Mark Hass, D-Beaverton, that might best be called Measure 97 Lite? Even without a firm proposal in place, the broad outline of what’s being discussed is enough to make one thing clear: Hass and the others need a history lesson.
Gross receipts taxes — charged on total revenues, whether or not a company makes a profit — are bad for business, bad for consumers and, ultimately, bad for the economy. That’s why, while they were popular before World War II, they largely have been abandoned since. Among their problems:
They are, no matter what their supporters say, a hidden sales tax. In fact, they’re often several hidden sales taxes piled on top of one another so that consumers are charged for taxes paid by manufacturers and retailers alike.
And while most of us agree that taxes should be “fair,” gross receipts taxes are not. They’re not charged on profit or ability to pay or government services used. In fact, a company can be losing money and still be paying gross receipts taxes.
Oregon does need tax reform. It also needs serious, long-term spending reform, and lawmakers must do both. The gross receipts tax misses the mark.