The Associated Press reports backers of Initiative Petition 28 in Oregon are close to qualifying the measure for the November ballot. And, yes, it’s a big deal.
A massive $2.8 billion annual corporate tax hike is likely headed to Oregon voters in November, a move that could create the most aggressive tax climate for big business of any state in the nation…
The proposal’s labor-union backers are just one step from getting the measure on the ballot after submitting 130,000 signatures to state elections officials last week. They say it would tap a tiny portion of Oregon businesses while bringing a huge boost to cash-strapped public education, health care and senior services.
But a long-awaited state analysis, released Monday, found the proposed tax hike would come with major pitfalls for wages, jobs and consumers’ pocketbooks.
The state analysis is clear. Among the findings:
IP 28 would increase total state taxes by approximately 25% and combined state and local taxes by 15%. There is very little empirical evidence on how state economies respond to such large changes because they rarely occur at the state level. The concentrated impact of the measure on a relatively few large taxpayers creates strong incentives for difficult to predict revenue reducing corporate tax planning strategies.
Those “tax planning strategies” would certainly include relocation. We’ll not go into detail – interested readers should check out the state report – but want to flag this conclusion from the state’s economic impact analysis:
IP 28 slows private sector employment growth and accelerates public sector growth. The additional revenue generated by the measure is expected to increase 2022 public sector employment growth by 17,700 jobs compared to the current law projection. This estimate assumes the mix of public sector spending does not change…Private sector employment is reduced by 38,200 in 2022 compared to the current law forecast, thereby reducing projected private sector employment growth from 148,200 to 110,100 over the 2017-2022 period. Over half of the reduction in private sector employment growth is expected to occur in three sectors: retail trade, wholesale trade and health services.
AP quotes the Tax Foundation as saying the measure would give Oregon “the worst corporate tax climate in the country.” The campaign is expected to be, well, vigorous.
Unions and business are lining up for what’s been described as political World War III over the measure.
More on the measure in The Oregonian.
Meanwhile, in Washington, the talk of tax increases for education in 2017 is increasing.
In the Seattle Times, three University of Washington faculty members argue that Gov. Inslee should make support for higher taxes for higher education a criterion in his selection of UW regents.
In the Olympian, the head of Washington State Board for Community and Technical Colleges and the president of the South Puget Sound Community College urge increased investment in community colleges.
And, still at the top of the agenda, is full funding for basic education. The Seattle Times editorial board writes,
The reason lawmakers and Inslee haven’t reached a deal is that the solution is politically daunting. It probably includes a huge property-tax increase, and should include discussions about a new tax source, like capital-gains taxes. It also will likely require a statewide collective bargaining system for teachers, an idea that makes the teachers union — big supporters of Inslee and most Democrats — irate.
The November campaign in Oregon may be a preview of the debate Washingtonians will be having next year.