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Humorist Dave Barry once quipped, “Democrats seem to be basically nicer people, but they have demonstrated time and time again they have the management skills of celery.”
It’s not true, of course, but it certainly seems so sometimes. That’s not to say that Republicans don’t commit their own missteps, but usually they take a little longer than one session to trip over their own feet. By their own admission, they nearly cannibalized their own party during the past eight years.
But what could Democrats have been thinking when they passed a permanent tax increase on the gross revenue of corporations, and permanent income tax hikes for businesses and individuals? Is there a death wish in the caucus on the left?
Some changes were needed, to be sure. The $10 minimum tax dates back to 1931 and, adjusting for inflation, would equal more than $260 today. But the intransigence of Democrats, their refusal to compromise with the business lobby, will bite them in the rear come election time.
To be fair, the task of the 75th Legislative Assembly is immense. Legislators have to balance a budget in dire economic circumstances with unemployment hovering above 13 percent and businesses facing steep cuts of their own. But instead of making these tax hikes permanent, they should have let them sunset, all the while working out a more palatable tax structure overhaul.
It’s true that good legislation has come from this session. The transportation package is an example. Years of hard work by public/private partnerships finally paid off with $192 million dedicated to Phase I of the Newberg-Dundee Bypass and, statewide, other essential projects will become possible for years to come. The lesson there is that compromise works. Bipartisanship works.
But Democratic majorities have crammed these permanent tax increases down our throats. Corporations will be taxed on sales revenue, even if the companies are losing money, up to $100,000 minimum tax on sales exceeding $10 million. There are gross inconsistencies in the process, such as a $2,000 tax on sales of $3.999 million and a $4,000 tax on sales of $4.0 million.
The business income tax hike, at least, sunsets after four years except for companies making more than $10 million in profits. Personal taxes on incomes above $125,000, however, jump 20 percent for three years, then settle at a permanent 10 percent hike.
Like it or not, businesses are the engines of our economy, and our local businesses are not enemies of the people. Corporate greed at some levels may demand regulatory measures, but don’t let that paint a false picture of the millions of honest businesses that employ most Americans.
The Oregon tax code needs an overhaul, starting with elimination or major changes for the kicker laws and establishment of a sizable, mandatory rainy-day fund.
But by creating a new tax on unprofitable businesses, and passing permanent tax hikes for individuals and businesses, Oregon Democrats abused their super-majority status.
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