Seems it's okay to count a corporation as a "person" so it can be taxed, but then go back to non-person status for everything else. Which is it?

Personally I find common sense reasons for some basic corporate law but these should never allow an actual person or persons from being held accountable for dumping stuff in a river, or committing fraud, etc. When a company is fined, someone is escaping punishment, and doesn't lose a cent.

Bob Tiernan Portland

I have checked with the IRS, FASB, GASB and AICPA and I can't find any guidance as to what "tax fairness" means.

Carla: Great post. More dialogue like this will help all Oregonians really grasp that it costs money to provide high quality schools, secure prisons, fair regulation, and other things our communities need -- and want. My business does more than $500,000 annual sales in Oregon, and so the minimum state income tax we'll pay is $500 -- or about $40 a month. That's less than we pay for a single land-line dial tone. From our point of view, that $500 will provide a good value that helps our business thrive. Just a friendly note: I think you meant that economists mostly agree it's "... worse to cut spending during a recession than to raise taxes..."

Hey there - periodically I do wonder what a change in S Corp taxes will do to me, since, right now, it's good for me to be one for my writing work to keep a smidgeon more of what I earned. If I'm not an S-Corp, about half of my consult or writing gig fees go to the state. If I am registered, I keep my pay at the basic level of a regular employee of any old company. I'm just a little person who does gigs when she can on the S-Corp side. I get worried at times that this will be put out of my reach via extreme increases in the registration fee or other carve-ups. Unlike Civiletti and others who make enough to live on year after year, as S-Corps. My situation is more-periodic, partly due to a lack of focus on keeping the flow of projects going these days.

I am terrified that I, like a hapless dolphin, will get swept up in the tuna nets of "tax scrounging" on the part of the state!

Bob Tiernan - please do the right thing and identify yourself every time you post. Tell us which one you are when you post - it will attach a little bit of honor to your doubtful name.

The petitioners have come out. I saw them trying to get people to sign on to a ballot measure to reduce government funding to starvation levels.

They were right in front of the public library, across the street from the transit station, and two blocks from the firehouse.

Maybe they're right. Maybe people who hate taxes should be able to opt out of paying any, and be exempt from police and fire protection. If they own businesses, those businesses would be exempt from protection against shoplifting and fraud, and their bank deposits would not be covered by the FDIC. They could get a special card exempting them from taxes, another sticker for their car so that they can pay user fees on the roads that taxpeyaers get to use as part of their taxpayer status, and their names, addresses and the names of their businesses could be put on a public registry, just like the sex offenders.

I disagree with them having to wear scarlet letters to identify themselves as non taxpayers. Instead, lets take it one step further and make them "put their money where there mouth is" by exiling them to a Latin American country where taxes are low, you can buy anything including your freedom from jail, have to live in an armed compound with 24 hour surveillance and guards to protect one from the shanty town thugs, and have to move everywhere in an armed escort to protect yourself from an armed thug on a motorbike who will blow your brains out just to get your wallet.

After all, taxes are the prices we pay to live in a society that has given us the opportunity to succeed beyond all expectations or fail even when one was born into the best of circumstances. If you cannot grasp that taxes are the price to pay for all that was given to you by the luck of being born here, then you should get the hell out and take your family and friends with you.

I think it would be a good idea to use the terms profit, or gross revenue, and avoid the term earnings. It appears a lot of these writers are using "earnings" when they're referring to gross sales. I think a lot of people think earnings means profits.

This makes a big difference in assessing fairness. A company with a million in gross revenue may still have no profit in a bad year. So a $1,000 increase is meaningful. But a company with a million in profit, well $1,000 is less meaningful.

Taxable income is the portion of income that is the subject of taxation according to the laws that determine what is income and the taxation rate for that income. Generally, taxable income refers to an individual's (or corporation's) gross income, adjusted for various deductions allowable by statute.

The facts are quite simple. Oregon levies a tax against a corporation w/o taxable income. That is what they are raising. I still don't understand why there is no minimum tax on individuals since the precedent has been set that Oregon will tax w/o taxable income.

Lets take Lithia Motors as an example. They have Rev of $2.6B last year. Since I cannot determine what percentage of revenue was in Oregon, i am making an educated guess that since their Oregon dealerships account for 17% of their total dealerships, their OR sales should be around 17% as well.

That amounts to $450M in OR sales. That means, according to the info provided above, Lithia Motors will be forced to pay a minimum tax of $100,000. Fine. Except that they LOST $252.6M last year. They have NO taxable income.

In 2006 510,012 taxpayers in the state of Oregon had zero taxable income. That is 31% of individual taxpayers. What minimum tax did they pay? ZERO

TJ: Earnings is the correct term when talking about the increase in the corporate income tax rates. But in this article, and in many articles, they talk about not only the income tax increase, but also the minimum tax applied to all businesses based on revenue. Not earnings or profit. This is a separate tax. In fact, thats what the table at the top of this article is in reference to. And there are at least two references in this article where confusing terms were used. (Ex: where the author argues that a company "making" 9.5 million won't "make" 10 million because of a $7500 additional tax. She should be talking about revenue to make it clear that this is gross sales, not profit. Also , Mr. Stoll in the excerpt is clearly talking about the minimip tax based on sales yet he refers to earnings)

So, my point is, we should be careful with language, and by using "gross revenue" and "profit" (which I think everyone understands easily) instead of earnings I think it keeps the differences more clear for people. The last thing you'd want to do is to weaken a strong argument with imprecise language.

Just so everybody here understands that 'net income' or 'profit' (or ability to convince someone to loan you money to generate an adequate return on the same) is required for businesses to grant raises and pay increasingly higher benefit costs to current employees - as well as expand/grow (e.g., hire new employees) and/or for some businesses pay some sort of return to investors - not just pay higher taxes, put it in the bank, or to the business owners spend on a riotous lives of luxury. Some here may scoff at the need to pay returns to investors - until they look at their own 401(k) and/or investment portfolio statements.

In a stagnant economy with the cost of many if not most goods/services (both public and private) going up (which this tax increase will likely only exacerbate - in addition to projected higher energy and health care costs), profit margins are continuing to be squeezed and that additional 1.1 to 1.3% drain on net profits is going to make its way downhill.

So anyone who believes businesses are just going to suck this up and not bother your pretty little heads in some way as you go about your day-to-day lives (higher prices, wage freezes, reduced benefits, job cuts or putting expansion plans on hold, reduction in demand and/or more pressure for lower prices on locally-sourced goods/services or just plain outsourcing, less charitable giving, etc etc) is incredibly naive. Newton's 3rd law is going to come into play here to some degree.

I'm not so much against the idea of a tax increase as the seeming prevailing giddy attitude here that 'we're sticking this $4.4B it to the man and ain't nothing they can do about it'... In words so popular here, 'I'm just sayin...'

MP3,

Here's how badly Oregon is gouging Lithia using your numbers.

2,600,000,000 Gross Revenue

 -252,600,000 Annual loss
     +100,000 OR corp min

Them there decimal places make your screams of outrage a bit difficult to hear.............The amount could have been offset by skipping a day's worth of landscaping fees, or ending an executive retreat two days early, or...hey.....how about they inflate all the tires on the salesmen's demo cars by an additional 5 to 7 pounds.

Bottom line? as a percentage, $100,000 is chicken feed when you're dealing with Billions.

@Pat

So they have a taxable income of NEGATIVE $252 Million, so whats another 100,000? With logic like that it's no wonder I left the Dims and became NAV.

So then you support a minimum tax on individuals, b/c really, who couldn't pay a $100 min. All they need to do is give up their daily Starbucks.

Actually, if I were Lithia, I would place that ten cents on the invoice and line item it as "unofficial Oregon sales tax"

Kari--Do you support a minimum tax on individuals with NO taxable income?

Kari says: Sure. It's called the Alternative Minimum Tax What's your point?

eh... sorry but no. As someone who has paid both regular income tax and copious amounts of AMT in the same year several times (well prior to those evil Bush tax cuts, mind you...), I assure you the AMT is not a minimum tax on individuals with NO taxable income.

Better study up on that one. The name is very misleading.

Carla- Thank you for the Wikipedia summary. But it doesn't invalidate my statement that '...the AMT is not a minimum tax on individuals with NO taxable income.'

That may have been the original intent of AMT but it is no longer the case. Read more than just the first paragraph into that Wikipedia article.

@TJ, Kari et al

Taxpayer A has $0 taxable income Taxpayer B has $0 taxable income

Which one(s) do you think should pay a minimum tax?

In 2006 510,012 taxpayers in the state of Oregon had zero taxable income. That is 31% of individual taxpayers.

Um, mp, your numbers might be off. The Oregon Dept. of Revenue says that 141,113 returns in 2006 were from people with no taxable income. That's 8%.

But, really, if you want to give Oregon voters the choice between raising taxes on the poorest 8% of individuals vs. raising the $10 corporate minimum and increasing the marginal rate on personal income above $250,000, I think we can all guess how that election would turn out.

Let me see if I understand this....

A company in Oregon creates a product that grosses 2.6 billion but loses a few million here and there. But in the process of billing for 2.6 billion in products and services said company uses:

1. city and county sewers
2. city and county roads
3. city and county law enforcement
4. county and state court systems
5. city and county transportation systems for their employees

and enough infrastucture to choke a freakin' horse.

For example, contrary to popular believe 60% of the court's time is used NOT for nutcases denying their children medical care, but by the Lithias, Nikes, and Intels of Oregon. And yet these corporate apologist want to basically give these companies a free pass on the direct expenses they incurr during business in Oregon?

It's called Corporate Welfare and hell yes Lithia should pay a minimum tax for doing business in Oregon (or anywhere else in the US for that matter).

p.s. a minor correction: Lithia Motors, Inc. announced for their latest quarter that net income from continuing operations in the second quarter of 2009 was $4.1 million or nineteen cents per diluted share.

@TJ, Kari et al

Taxpayer A has $0 taxable income Taxpayer B has $0 taxable income

Which one(s) do you think should pay a minimum tax?

I got it! I got it!

Whichever one is not an actual person whose non-taxable income paid the CEO, all the employees, contractors, and most importantly the accountant(s) who make damned sure to juggle the $2.5 billion that flows through his clients hand during the year in such a way that "he" pays no taxes.

The guy that sells lottery tickets and cigarettes for minimum wage and pays a huge percentage of his/her income to FICA, workman's comp, and social security gets a break, because using your example, even if the poor bastard managed to clear $26,000 in a year, fair play would dictate that we nick him for a dime, just like the other guy.....

@Joseph

My numbers were from IRS, so I don't know why the disparity?

@Scott

Numbers quoted were 2008 FY

Scott,

You might have a point if Lithia had no employees in the state of Oregon - no payroll; no state income taxes or property taxes paid by those employees to the state of Oregon.

Kari and Carla may be right that a dime here or there, or a fraction of a percent is chicken feed so why the complaint.

The point being missed in the psychological factor - government spending is growing while most everyone else is having to cut back.

Bottom line, the need for a tax increase is not being spelled out in terms that everyone can easily understand. The sound bite is that spending is going up while everyone else is forced to cut back.

I'm not talking about the back and forth here on BO, but rather everywhere else.

Mike

The sound bite is that spending is going up while everyone else is forced to cut back.

Yeah, well, the sound bite is a LIE:

• Because of the bad economy (aka, everyone else being forced to cut back), government revenues are down. WAY down. This isn't the Feds we're talking about; states can't do the deficit spending thing.

• Because of the bad economy (aka, everyone else having their jobs and incomes cut), the need for government services is going up. WAY up. More services cost more money. But to say "government spending" is up is like saying it is somehow discretionary. The only way government spending doesn't go up when the need goes up is to CUT services, not exactly the right medicine when the needs go up.

• When spending does go up in Oregon it is largely because of un-funded, corporate and right-wing bought and paid for ballot measures. And plenty of paid lobbyists in Salem make sure our legi-critters don't cut anything that might hurt their boss's bottom line. When that doesn't work (which is rarely), they run screaming to the ballot where they can LIE about "tax and spend!" all they want. Our campaign bribery system at work.

And as for Lithia, newsflash: taxes paid by Lithia employees are paid... by those individuals--should a company not have to pay any taxes because it employees people who pay taxes?? What nonsense.

Jay

So, if a company has 450,000.00 gross sales annually and have a net loss they pay $150.00. If they have a profit, they pay at the percentage bracket for that profit amount. Do I have that right?

So, if a company has 450,000.00 gross sales annually and have a net loss they pay $150.00. If they have a profit, they pay at the percentage bracket for that profit amount. Do I have that right?

Yes, Dave. And if they're making $250,000 or less in profit, their tax rate will be the same as today: 6.6%.

@Jay

-should a company not have to pay any taxes because it employees people who pay taxes?? What nonsense.

Of course Lithia pays property taxes which support the infastructure they use. But to suggest they should have to pay income tax when they have no taxable income is, in your words, nonsense.

BTW, 1/3 of individual filers in Oregon pay no income tax b/c they have no taxable income. What's the difference?

"Of course Lithia pays property taxes which support the infastructure they use."

No they don't.

Posted by: Scott in Damascus | Aug 3, 2009 3:02:25 PM

"Of course Lithia pays property taxes which support the infastructure they use."

No they don't.

Care to provide a citation for that?

Carla: "Start with the idea that you can't repeal the laws of economics. Even if they are inconvenient."--Larry Summers. And then consider: "Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passions, they cannot alter the state of facts and evidence."--John Adams

The fact is that business entities do not pay taxes! They only collect them. If a business cannot collect the tax then it goes out of business (or never gets started). Taxes are a cost of business and must be recouped if the business is to survive. Businesses collect taxes in the form of higher prices to consumers, lower wages to employees, lower returns on investment to the owners (proprietor, partners, or shareholders), or a combination of these.

Taxes on business are hidden taxes; hidden in higher prices, lower wages, and lower returns on investment. I suspect you favor lower prices and higher wages as much as anyone. I also suspect that when it comes to ROI in your own portfolio of savings or in shares held by AFSCME, NEA/OEA, AFL-CIO, and other labor union pension funds (as opposed to ROI in shares owned by those rich, rascally, Republican plutocrat oppressors of the working class) you also favor higher ROI.

I presume that you are also in favor of transparency in government (See http://www.whitehouse.gov/the_press_office/TransparencyandOpenGovernment/: "Government should be transparent. Transparency promotes accountability and provides information for citizens about what their Government is doing.").

Therefore, I would expect that you would be adamantly opposed to hidden taxes, unless, of course, you are afraid that the taxpaying and voting public would be aghast to know how much their government is actually costing them when higher prices, lower wages, and lower ROI are added to the tax bills they actually receive and pay directly.

The laws of economics cannot be repealed; facts are stubborn things: there is an inverse correlation between tax rates and economic performance. Lower tax rates lead to higher wages, lower unemployment, a more productive economy, and --wonder of wonders-- enough new wealth to fill the public coffers and actually pay for a strong defense, a sound public infrastructure, well-equipped and well-staffed institutions of public health, public safety and public education.

BTW: I would like to visit BlueOregon more often if it would be possible maintain a higher level of discourse than is suggested by "how much it sucks to be a Republican these days." On the other hand, perhaps it was a similar comment by a Loyalist about "how much it sucks to be a Patriot these days" that inspired Tom Paine to write in December, 1776: "THESE are the times that try men's souls. The summer soldier and the sunshine patriot will, in this crisis, shrink from the service of their country; but he that stands by it now, deserves the love and thanks of man and woman. Tyranny, like hell, is not easily conquered; yet we have this consolation with us, that the harder the conflict, the more glorious the triumph. What we obtain too cheap, we esteem too lightly: it is dearness only that gives every thing its value. Heaven knows how to put a proper price upon its goods; and it would be strange indeed if so celestial an article as FREEDOM should not be highly rated."

Rob, read Scott in Damascus who finally points out that what the anti-tax Business Associations types want is to be free loaders and not pay their share for public endeavors from roads to educating and training workers to police.

Fact is rich folk garner log-rhythmic returns on all public investments.

And their biggest lie is that they are something angelically above the government. We are the "job creators. Don't tax me, tax my ungrateful workers."

Bush economics which got us into this fine mess were not trickle down economics, they were gusher-up. The game was rigged by deregulation and outright class-based favoritism of the super rich; ("my base" as he so famously stated.)

So vast amounts of money were pumped upwards to the heavenly homes of the rich which were then used, NOT TO CREATE MORE JOBS, but to chase paper wealth manufactured not by products producing, but by generating more paper wealth to chase in the form of junk bonds, conflated mortgage based "securities' (interesting contradiction, that) and other illusory debt instruments.

Why didn't Congress and then Obama let AIG, Morgan Stanley, Goldman Sachs, Bank of Am & Citibank string out to dry and clean up their own messes?

Instead they should have taken the two-three plus trillion and sent it directly into backing small town and moss-backed conservative banks, credit unions, small biz loans, green energy grants, state revenue sharing to reward the institutions that got it right and not the billions dollar-bonuses self adulating outfits that fricked up the economy in the first place.

There is still time to turn this around, but we could have created the kind of country that regenerates its infrastructure, regrows it's middle class and does not choke itself in green-house gases.

I personally regard everything that Greenspan, Bernanke and Paulson says as literally "Green House Gas" in as much as they are all toadies of the houses of green.

So for every dollar in tax cuts to the rich we saw 30 cents eventually drip back down into the pedestrian economy.

Whereas public expenditures in general and infra-structure construction in particular, for every dollar expended their are at least $3.00 garnered by the true job sustaining and generating workaday world.

The saddest victims of this are not the forever shat on working class- they are largely used to it. It is the vast majority of middle class Americans who see their jobs shipped abroad, their wages shrink or disappear, their mortgages caught in debt shell games where they will never get the pea and their children less educated and set to earn less for the first time in American history.

<h2>And the fact that the Republicans have conned their Dixiecan and trailer-trash wings into supporting class war against their own interests is the biggest joke of the century.</h2>