By editorial board • 

Measure 97 a sales tax in thinly veiled disguise

What’s the good of working to increase graduation rates, only to send newly minted alumni out into a job market devastated by Measure 97? Why invest in expanded services to seniors, only to force them into paying more at the gas stations, grocery stores and pharmacies under this disguised sales tax?

And how can we promise $3 billion a biennium in new revenue would be spent on “public early childhood and K-12 education, health care, and services for senior citizens,” as the measure’s union sponsors claim, when it would actually feed a general fund Oregon politicians can allocate any way they wish?

These are questions voters must consider when making their decision on 97, easily this election’s most contentious ballot measure. For the sake of Oregon, we are confident that would persuade them to join us in voting no. 

The deceptively titled Oregon Business Tax Increase Initiative, created and financed by organized labor, would exact a 2.5 percent tax on C corporation gross sales exceeding $25 million. Yes, sales, not income, thus serving to punish two elements of the economy disproportionately — consumers and high-volume, low-margin retailers, such as grocery stores.

Backers claim the tax would be largely limited to greedy out-of-state corporate goliaths, whose CEOs are capable of jetting off to exclusive island retreats any time they wish. In fact, it would also hit homegrown retailers like Wilco and Bi-Mart, who aren’t capable of simply brushing it off, as Walmart might.

What’s more, manufacturers, distributors and retailers would each build the increase into their price structure and pass it on to the maximum extent possible. Given the multiplier effect, the consumer would end up bearing a big portion of the burden in the end.

A report released in May by the nonpartisan Legislative Revenue Office estimated Measure 97 would cost the average Oregonian $600 a year, or $2,400 a year for a family of four. It estimated public-sector job gains at 18,000, dwarfed by private-sector job losses predicted at 38,000.

A counter study, commissioned by Measure 97 supporters, estimates a loss of 17,000 private-sector jobs and gain of 30,000 public-sector jobs. But even that scenario has a downside, as it would further stress a public employee retirement system already facing a $22 billion shortfall.

The timing for a record-breaking, tradition-defying sales tax couldn’t be worse, as Oregon has enjoyed two straight years of strong economic growth. It is finally approaching a full recovery from the Great Recession, and Measure 97 would toss a grenade into that. 

If enacted, Measure 97 would surely dominate the upcoming Legislative session. Petitions for relief and pleas for funding would trigger endless debate. There are too many pressing needs in our state for our elected officials to get bogged down in such a political quagmire.

We have no quarrel with the premise that corporate America is getting a free ride in Oregon, and that needs to end. Putting the best face on it, perhaps the current proposal could serve as a framework for a better-conceived measure to address that inequity.

Enacting an Oregon sales tax promises to create a lot more harm and havoc than good.

Comments

Don Dix

From the article ... "The deceptively titled Oregon Business Tax Increase Initiative, created and financed by organized labor, would exact a 2.5 percent tax on C corporation gross sales exceeding $25 million. Yes, sales, not income."

That's a perfect explanation of this measure and how Oregon's government operates. Labor unions don't care about private job loss, but are very interested in adding more union jobs to the PERS account (more dues so union leaders can further bribe lawmakers). Question -- do we elect legislators to cave into union demands and ideas, or to represent the citizens of the state. Presently, the former is the overwhelming rule!

And 9 times Oregon has said no to a sales tax, yet here we go again! Isn't it time to break the union stranglehold on Oregon's government? That could be accomplished by electing no more Ds to positions of influence (by observation for years, it is my belief that the Ds are only beholden to unions and not the citizens).

If any other 'political position' were in control of Oregon's government, the field of influence would not be dominated by union money, and Oregon would be much better off! NO on 97!

Michael

Stating and re-stating the problems is the easy part. What are the proposed solutions to the elephant in the room, the giant PERS bill looming that the state cannot legally escape.

I would love to hear some solutions.

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