Thursday, October 08, 2009

New Tax Laws, Oregon Hypocrites, and Corporations Losing Money

The Portland Tribune’s Steve Law has a long article on the impact of the raise in Oregon taxes on Oregon corporate leaders moving to Vancouver.

It’s sort of a tempest in a teapot issue. Whether business leaders (or PERS retirees*) move to Vancouver to avoid Oregon state income tax or state capital gains taxes is not earth shaking. More important, considering Oregon’s 4th highest unemployment rate in the nation, is the number of businesses that relocate, downsize or close.

But this story has some interesting highlights. First is businessman Randy Miller’s assertion that earning money in Oregon and moving to Washington to protect it is hypocritical.
“There’s a moral issue” concerning civic leaders who make their fortunes in Oregon and then shift their assets to Washington to escape taxes, says Randy Miller, himself a former Portland Chamber of Commerce chairman. Miller sold his business, The Moore Co., but remains active in civic affairs here and resides in Portland Heights.

“As soon as they have one big capital gain, they leave,” Miller says of some of his peers. “That is so hypocritical.”
I guess. But, another view, from a lot lower down the income food chain than Randy Miller, is that Miller earning lots of money in Oregon and then trying to shield as big a chunk of it as possible from taxes is not substantially less hypocritical. If taxes are good, why not pay all you can? (And there’s the goofy photo of Miller riding his bike out of what looks to be his huge residential paved parking area that could comfortably hold 10 or 20 cars. Mr. Common Man?) The saving grace is that Miller, unlike a lot of fat cat Hollywood and media celebrities, is lecturing his fellow fat cats rather than the mice about the ethics of paying more taxes.

Another intriguing comment is that Oregon’s new tax increase laws include taxing companies losing money.
Critics of the recent tax increases point out that they’ll require money-losing companies to pay state taxes. That’s true. But supporters of the tax increases note that a majority of Oregon corporations have been escaping any state corporate tax, and paying the token $10 corporate minimum tax.
Way to shove more workers on to unemployment rolls. What kind of legislative incompetence does it take to write a bill that makes sure it taxes corporations losing money?

*Even a bunch of Oregon little guys, averaging under $23,000/yr in benefits, may have joined big time corporate leaders in making a "hypocritical" move:
It’s not just prominent or wealthy people who take advantage of Washington’s lack of income taxes. The Oregon Public Employees Retirement System pays retirement benefits to 6,567 people in Washington, plus 634 in Nevada, another state without income taxes.

Nobody knows how many of those people moved to escape Oregon’s 9 percent income tax rate.

But the average payment to those in Washington is $22,085 a year, PERS reports, so those people save upwards of $1,800 a year in state taxes, on average. PERS pays $145 million a year in retirement benefits to folks living in Washington and $14 million to those in Nevada.

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