OREGON HOUSE REPUBLICANS

HOUSE PASSES JOB-KILLING TAX INCREASES

Democrats’ Tax Increases Threaten Oregon’s Small Businesses

SALEM— The House of Representatives today passed $733 million in permanent tax increases that House Republicans say will threaten Oregon jobs and prolong the state’s economic recovery. The Democrats’ income (HB 2649) and corporate (HB 3405) tax increases will be exceptionally harmful to the state’s small businesses.

As part of the Legislature’s Billion Dollar Tax Week, the House also passed a $433 million tax increase on health care yesterday. Democrats are pushing the tax increases despite state projections that call for 17 percent and 20 percent growth in the next two biennia following 2009-11.

Democrats voted to raise income taxes on high-income earners, even though 75 percent of the 31,000 Oregonians affected by HB 2649 are owners of small and family-owned businesses.  House Republicans said the tax increase will kill jobs and drive individuals and businesses to other states that are more supportive of investors and small businesses.

“Small business is the backbone of Oregon’s economy,” said House Republican Leader Bruce Hanna (R-Roseburg). “Less than a third of income earned by these Oregonians is generated by wages; the rest of their income is business-related. By increasing taxes on small business owners, there will be less resources for job creation and reinvestment in Oregon equipment and services.”

Democrats voted to raise taxes on businesses, even though nearly all industrial sectors have lost jobs over the past year.  HB 3405 isn’t merely an update to the corporate minimum tax, but a new way to tax Oregon businesses whether they’re successful or not.  

“Disregarding profitability, HB 3405 represents a 33 percent increase in corporate taxes over the next two years,” said Deputy Republican Leader Kevin Cameron (R-Salem). “Because virtually no businesses have enjoyed a 33 percent increase in revenue, businesses will be forced to sacrifice jobs in order to send more dollars to Salem.”

Earlier this session, House and Senate Republicans presented the Back to Basics budget plan that funds a full school year, protects public safety and human services, and doesn’t require Oregon families and businesses to send more of their hard earned dollars to Salem. Democrats immediately rejected the plan and its identified savings, opting instead to raise taxes.

“The Legislature could have followed our lead in examining the billions of dollars in ending fund balances that could be directed to higher priorities in the budget,” Rep. Hanna said. “We could have produced hundreds of millions in savings by bringing Oregon into line with other states that require benefit contributions or deductibles for state workers. These tax increases were not necessary, yet Democrats are pushing ahead despite the consequences to Oregon jobs and our economy.”

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