A Tax System that Matches Oregon Values

It's time for Oregon legislators to establish a new set of priorities for Oregon, priorities that better match the values of Oregonians.

(SILVERTON, Ore.) - This tax season, a minimum wage worker who was employed full-time last year and raising one child will pay about $321 in state income taxes. That's equivalent to the cost of about a month's worth of food based on Bureau of Labor Statistics data.

For a single parent working at minimum wage $321 is a lot of money, especially when you compare it to the income tax bill that Intel Corporation, with $9 billion in profits, likely paid last year: 10 bucks.

Why is Intel, with $9 billion in profits, probably paying only 10 bucks? Because over the last decade the actions of Oregon's legislature have not matched the values of Oregonians.

Intel hasn't always paid a pittance in state income taxes. In 1997, the company paid over $50 million in income taxes to Oregon. The company boasted at the time that it was the state's best corporate income taxpayer.

Today, though, thanks to huge corporate tax breaks handed to it by the Oregon legislature, Intel likely has joined the ranks of the majority of Oregon's corporations, who get off paying just 10 bucks a year in income taxes on their profits.

That's right, Intel, with $9 billion in profits, probably paid about three pennies for every dollar in state income taxes paid by a young working mother trying to raise a child on an annual income of about $16,200.

The story doesn't stop with Intel, either. Most corporations operating in Oregon pay three cents for every dollar paid in taxes by a minimum wage worker. Two-thirds of the corporations operating in Oregon, including 20 corporations with profits of $1 million or more, get away with paying just 10 bucks a year in state income taxes. It would take 32 of those corporations to match the income taxes we ask that young mother working at minimum wage to pay.

It's time for Oregon legislators to establish a new set of priorities for Oregon, priorities that better match the values of Oregonians. Oregon legislators wrongly shifted more of the costs of public structures away from big corporations and onto minimum wage workers and the rest of us. Let's build a tax system that better matches Oregon values.

Oregon could eliminate income taxes on the minimum wage working mother by increasing the state Earned Income Credit. Such an increase would help that mother keep food on her family's table, instead of sending a month's worth of her family's food budget to Salem to help pay for public structures -- universities and state police, for instance -- that Intel and other corporations operating in this state rely upon every day and get essentially for free.

That would it cost to eliminate the income tax on the minimum wage family? A little less than $50 million a year, or roughly the amount that Intel proudly paid in state income taxes a decade ago.

Oregonians believe hard-working families deserve food on the table. Next year, the legislature should better match its actions with Oregon values by increasing the state Earned Income Credit and raising the minimum corporate income tax so that corporations like Intel pay something similar to what they used to pay.

Think about it. Profitable Intel could once again proudly proclaim itself to be the state's best taxpayer, and families struggling to make ends meet by working at a minimum wage job could open their cupboards and find that Salem had decided to leave them a little more to eat.

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Sheldon March 28, 2008 11:51 am (Pacific time)

I agree with much of your analysis Henry, but when oil prices go down (and they will), nothing will happen. Just like the "kicker", nothing will be done about it unless the democrats have a significant majority in the legislature. Many close state senate and representative elections still exist so I don't forsee the corporate tax status quo changing anytime soon, nor in todays present economy do I see taxes being increased either. But fees (the hidden oppressive tax on the poor and middle class) will continue to skyrocket. So until you get that significant democratic majority in Oregon's legislature nothing will change, other than re-arranging state department budgets, uno, like moving the deck chairs on the Titantic!

Henry Ruark March 26, 2008 7:26 pm (Pacific time)

Frugal: Appreciate your points re joint disdain for action by both parties but longtime so-called "conservatives",in majority control, and close cooperation via K St. and state-level, leave neocon pattern of manipulation and "management" sharply on record. Rising public indignation, via growing "progressive wave already forming", may now force real action, and if NOT --cometh the Second American Revolution !! Far too many in once-happy "middle class" now find selves forced further and further "down" for that to continue for much longer.

Kevin March 26, 2008 5:08 pm (Pacific time)

I agree with the principle of this article. The author should also mention how much income tax is generated by the employees of intel. I would suspect millions of dollars. A state needs to be careful that it doesn't drive out the remaining good jobs to foreign countries. Take a look at the economies of Michigan and Ohio with the loss of auto jobs. There must be a median somewhere that can be reached for the best overall interest of the state and its citizens.

Frugal March 26, 2008 2:42 pm (Pacific time)

Labels may change, but being designated by some particular ideology(or whatever) is as old as recorded history, so we will always see some type of classification going on. As far as changing the tax structure we always hear candidates when running for office that they will attempt to implement something, but real change seems to always get put on the back burner until the next election cycle. As most of you know most cities and towns offer tax benefits for corporations to move into their political entities for the jobs and tax revenue that they bring (even in Portland big condo developers are offered the moon for luxury units, and many of these units displace much needed low income housing. Restructuring our corporate tax schedule will probably not happen anytime soon, and we have seen both major parties fully in charged at one time or another, and neither has done anything. It would be interesting to compare other states with higher corporate tax schedules than Oregons, then compare and contrast the tax revenue each particular state collects. Maybe some business grad student out there has that info with a linked source? I'd go for it myself, but my dance card is pretty full. Plus you should see the weeds I have to pull! Just exhausted thinking about it.

Henry Clay Ruark March 26, 2008 12:25 pm (Pacific time)

Frugal: Good question; same answer as for decades past: Corporation power in Oregon matches and usually overwhelms all else. Why do you think that joke minimum-$10 "corporate tax" has continued for SEVENTY YEARS ? Why do you suppose Big Tobacco was able to manipulate legislative actions up to and then into initiative then also manipulated via millions-spent to shelter more-millions/lost if poisonous nicotine product sales cut back ? That's why it took years to break away as much as we have seen so far --with much more needed yet. When "the people" finally regain voice-and-power you will see more, too. In 21st Century, old labels "liberal", "conservative", GOP and Dems faded,non-relevant now, and thus lost in large part since almost-all now controlled by dollar-impacts. New issues and same old problems demand new approach and same old vote power put to work once again for commonweal rather than for "corporate profit uber alles". First step is making sure any profit-maker corporation working within Oregon facility and location pays fair share of ongoing costs for all.

Frugal March 26, 2008 10:52 am (Pacific time)

Good article, but it begs the question, why has not the legislature done anything about this? They have the power to alter the tax schedule, so why haven't they done that? The current governor and the democratic-controlled legislature could have easily have shaken things up, but they simply sat on their hands. Who has the real power?

Henry Ruark March 26, 2008 7:48 am (Pacific time)

To all: The time has arrived when Oregonians will demand that THEIR elected legislators act in the best interests of their constituents, NOT of the bottom-line for corporations providing lush "campaign contributions". SEVENTY YEARS is far too long a tenure for the national joke of "$10 minimum corporate tax" for world-famous firms, and many other smaller but profit making ones, operating in our state, enjoying strong facilities and famed climate and lifestyle opportunities. Corporate social-economic responsibilities are different in the 21st Century, as some leading firms are already proving, still profitable but community-and-worker reoriented, too.

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A Tax System that Matches Oregon Values

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