Jeb Bladine: Oregon’s CAT new star of the tax show
I was a bit crabby to Rose Marie Caughran last month in the City Club lunch line.
McMinnville’s former library director, best known as volunteer curator of local art, trees and flowers, simply suggested a newspaper story about the relentless escalation of everyday prices. I said something like this: “You’re talking to the wrong guy, sister.”
OK, I didn’t really call Rose Marie “sister.” But I did blurt out this snippy response: “Oregon just handed us a new $25,000 to $30,000 tax bill, and now we have to pass it along to our customers.”
I later apologized to Rose Marie for my cantankerousness, but offer no regrets for hostility toward a continuing crush of government takeaways. And in 2020, the star of that show is Oregon’s insidious new gross receipts tax.
Oregon could — and probably should — be headed toward another tax revolt. In the past decade, business has absorbed the high cost of mandatory sick leave, a surging minimum wage, new overtime rules, state tax increases and all manner of increased fees for government services.
One obvious result is that a starter home now costs 50 percent more than it did five years ago. Behind the scenes, we’re experiencing similarly steady increases in the cost of insurance, health care, food, rent, utilities, transportation and a simple cup of coffee.
Now comes Oregon’s so-called “Commercial Activity Tax” — a CAT with nine lives. Here’s how a 2017 Tax Foundation article characterized gross receipts taxes:
“The flaws of gross receipts taxes are well documented … (they) lead to higher consumer prices, lower wages and fewer job opportunities, as the tax pyramids throughout the production cycle… The same product is taxed multiple times as it moves to the market … Under a corporate income tax, firms do not pay the tax if their profits are zero or negative. The same is not true of a gross receipts tax.”
Companies losing money suddenly will pay tens of thousands of dollars to the state; tax bills to many profitable businesses will rise by half; most, by necessity, will pass those costs along by increasing prices for goods and services.
One ray of light softened my rant this week, when Allan at Alpine Cleaners gave me the bill for mending a troublesome tear in a pair of wool slacks: $5. But even Allen admitted, citing some of the issues above, “I’m going to have to raise some prices.”
So, with more apologies to Rose Marie, I think those prices will keep going up.
Jeb Bladine can be reached at jbladine@newsregister.com or 503-687-1223.
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