The High Cost of Low, Low Business Taxes

Tell your network:

Tell your network:

The corporate-backed Council On State Taxation released their latest annual report on state and local business taxes, showing that Oregon is now tied for the lowest business tax rate in the nation.

For years, we’ve hovered in the bottom five states, but we’re now tied with North Carolina for the lowest taxes on business in the entire country. The question we now need to ask is: How much longer can we afford to have this dubious distinction?

You might remember a couple of years ago, when Oregon’s corporate lobbyists teamed up with the Tea Party to campaign against Measures 66 and 67, which were modest (and largely temporary) tax increases on corporations and wealthy households to pay for schools and critical services. To hear the lobbyists tell it, those tax increases were the equivalent of thermonuclear warfare.

But here’s the reality: The vast majority of businesses in Oregon now pay a corporate minimum tax of $150 (up from $10). Even larger corporations have a corporate minimum of about one-tenth of one percent of their overall revenue.

Meanwhile, the state continues to give away billions of dollars in tax breaks, many of which go to large corporations. At the same time legislators were cutting school budgets, the amount we’re projected to lose to tax breaks has increased by $3.4 billion.

According to the Legislative Revenue Office, corporations are projected to pay just 6% of the taxes that helped pay for schools, health services, and public safety in 2011-13. That’s down from 6.6%  just two years before, and down dramatically from the share they paid in the 1970s.

And that all adds up to a deep disinvestment in the things that make this state attractive to businesses and families alike: Our schools, our basic infrastructure, investments in higher education, a healthy environment, etc.

Here’s what we mean:

Class Sizes: Oregon now has the third highest class sizes in the country. At a pupil to teacher ratio of 20.3, Oregon is better than only two states: Arizona and Utah.

Class Sizes, Cont.: In order for Oregon to have class sizes at just the national average, we would have had to hire 9,000 more teachers last year. Instead, we laid off hundreds of teachers.

Class Sizes, Cont.: Class sizes in Oregon high schools increased by 28.6% from 2009 to 2011.

Per-Pupil Spending: Oregon spends 7 percent less per pupil than the national average.

Higher Education: Oregon is 45th in the nation for per-pupil spending on higher education. Only five states spend less on colleges and universities than we do.

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