Democrats like to think that Oregon has a progressive approach to state taxation. Yet despite Democratic control of the state legislature, since the 2009 recession, four actions have increased the wealth divide in Oregon and moved us down from the third most fair state for state and local taxation to the tenth, according to ITEP, the organization that generates the chart you clicked on. The chart source, Who Pays? A Distributional Analysis of the Tax Systems in All 50 States, finds that Oregon is the tenth best state for fair tax policy (as of 2018’s report).
- In 2013 the legislature created a Pass-Through Tax Break for business owners allowing them to pay a lower tax rate than their employees.
- The Corporate Activities Tax passed in 2019 gave the 5% highest earning taxpayers a tax break of $625 per year. Meanwhile the bottom 20% of Oregonians got nothing.
- Opportunity Zones created by Trump’s tax cuts in 2017 give wealthy investors Oregon tax breaks on top of the federal cuts. The legislature so far has failed to disconnect Oregon from the provision and align Oregon with California and Washington which do not provide state tax breaks for these investors.
- A 2021 measure that allows certain business owners a tax break on their federal taxes without extending it to all taxpayers known as the SALT workaround.
We need legislators and activists to reverse course.
In 2022 and 2023 we will work to increase taxes on timber, remove the 100% tax break for opportunity zone investors, lower the tax breaks for data centers, and other critical issues.
Time is urgent. The longer issues go uncorrected the more costly they will be to fix.
ITEP Institute on Taxation and Economic Policy 2018