Thank you for the reminder that we often label everything from small business to corporate megabeasts as "corporate interest", and it is not fair. Everyone from Pat Buchanan to the G8 protesters would do well to think on that, I dare say. I'd make an aside, as well, that I've valued "mp"'s posts here, for being the voice of real, small business. Most folks ingore the comma, methinks. Most pols definitely do.

Could it be that Ms. Chin-Ryan's business gets most of its money from government contracts?

Our experience providing service to government and electric utilities gives us a special perspective on your needs.

Talk about a misleading headline. It should read: Why SOME Oregon Small Businesses...

Just who the heck is this group? I have been a small business owner in Oregon since 1993 and have never heard of them. They don't even have their own website. They are advocating for issues that have no relevance to small business (social justice, cultural development).

They even call themselves a progressive non-partisan organization. Yeah, and Freedom Works is a conservative non-partisan group too. Progressive/Conservative are by definition partisan ideologies in themselves.

Let me make this clear before anyone even bothers trying...I have not made any statement about whether or not I support raising taxes on business, only the MANNER in which it is being done. I do not support a MINIMUM TAX on only select taxpayers. If you have no taxable income, one group should not be forced to pay a tax while another group does not.

If you want to create a business registration fee of $150/yr (or whatever) fine, but don't hold different tax paying entities to different standards.

Excellent. I hope small businesses will speak out in support of schools. Small businesses need to attack the Chamber of Commerce for their stance of hating public education and supporting every right wing extremist cause under the sun.

Garage Wine---are you one of those who believe that all "real" jobs are in the private sector, and that if an auditing firm were to audit random private contracting of what had previously been public sector tasks, that the private contractor would ALWAYS be found to have provided equal or better quality, same or lower complaint rate about procedures and staff, for the same or lower cost?

Given what happened with KBR and Blackwater in Iraq, and some private contracting here in this country, I am not convinced that all private contracting always produces the same or better result for a lower cost.

"If you have no taxable income, one group should not be forced to pay a tax while another group does not. "

Are you saying that the part time worker in fast food or retail should pay taxes at the same rate as a CEO?

Does that low wage worker deserve a standard personal deduction?

LT: you have just turned me into your biggest fan. You just blew in here like a freakin' kamikaze sword dancer, whirled round and round and round and then blew on out.

Heh.

@LT

What I am saying is what I said...that if Taxpayer A has $0.00 in taxable income and Taxpayer B has $0.00 in taxable income, they should both pay the same tax.

MP: I do not understand where the argument/what the argument is here. Is anyone asking taxpayer COMPANY A to pay taxes on zero income while taxpayer COMPANY B pays nothing on zero income?

P'raps I'm as doltish as some have come to believe!

@rw:

Given the nature of the wording of you post, I suspect you know exactly the point of my argument.

Now to the point you raise, Company A with $0 taxable income could pay $150 in taxes while Company B with $0 taxable income could pay $100,000. HERE

@Bill R.

Can you support your claim that CoC's hate public education b/c I googled that and got ZERO

"What I am saying is what I said...that if Taxpayer A has $0.00 in taxable income and Taxpayer B has $0.00 in taxable income, they should both pay the same tax."

So, if taxpayer A is a low wage worker who barely makes ends meet, and taxpayer B worked for Enron when they owned PGE and hired accountants to make it look like they had no taxable income, taxpayer B should pay the same amount of tax as the low wage worker?

It was the "Enron has no Oregon taxable income" scam which started many people thinking it was time to raise the corporate minimum. If you think Enron's malfeasance is the fault of Democrats, I have to remind you how many voters are not registered in major parties. Are businesses responsible for their own actions? Or are they entitled to having the legislature do what they ask?

This whole nonsense that business deserves whatever they want and we should take it on faith that low taxes create jobs more than any other single factor or else we are "pro-tax" because all good people believe low taxes create jobs regardless of any other factor is something that I reject.

Nope, I don't. So just answer the question - I cannot follow, now what you all are arguing about since the last round. I assume that if a company makes zero profit, they owe no tax on what they did not earn. No matter what company we are talking about. I now want to konw what the argument is. Is there a graduated requirement that is unfair to higher earners? Or the opposite? I do know that even tho I have not escaped my basic reality, now that I am earning enough to not be afraid month to month, but I am still always a little uneasy, I no longer get any tax return. I consider that perhaps I'm being incrementally taxed harder and harder, yet I've not broken to a level at which I can truly afford more, since, given the incremental nature of that which is being taken from me maintains me at just about the same level as when I did not always make enough to pay all bills off and got a return. A milestone health even such as my son's wisdom teeth now has me back in significant debt and looking strategically at how I can meet that plus the basic daily living I do. Is THIS what the complaint is?

So I'm now unsure as to what is being beefed here.

It gets convoluted almost immediately.

@LT

If I understand what you are saying, Taxpayer B is an individual who hired accountants to make it look like they had no taxable income...then Taxpayer B and his accountants committed tax evasion which is a crime and not relevant at all to what I am talking about.

It was the "Enron has no Oregon taxable income" scam... If you are alleging that Enron committed tax evasion in the State of Oregon, then I suggest you turn over your evidence to the AG. If you are simply pissed that they followed the tax laws as laid out by the IRS and ODOR, direct your concerns to the IRS, ODOR and your many elected leaders.

@rw

I assume that if a company makes zero profit, they owe no tax on what they did not earn. No matter what company we are talking about

INCORRECT. Presently, corporations must pay $10 as a minimum tax on $0 taxable income. The new rules will require them to pay between $150-$100,000 on a sliding scale based on revenues WITH NO TAXABLE INCOME.

My singular gripe is that corporations must pay a MINIMUM TAX on no taxable income and individual taxpayers do not.

mp -

Assume two businesses (both organized as "C" corporations). The first has 12 owners and 35 employees and grosses 8 million dollars. On December 31st the owners meet and their accountant advises them that year-to-date the company has made a potential taxable profit of $2,400,000 (net of previously paid owner and employee salaries and operating expenses to date). So the owners declare themselves each a $200,000 year-end bonus and, since salaries and bonuses are deductable in determining whether a profit exists, magically, the "taxable income" of this company has become -ZERO-.

The second company has one hard working owner and brings in $250,000.00 from gross sales. The owner takes a draw of $75K per year and pays salaries for a few people at modest wages. After deducting salaries, cost of goods, etc. etc. at the end of the year, there is -ZERO - left for profits or taxable income.

Do you really believe that both companies should pay the same business tax?

So, MP, here is the bad news. Another anecdote: I LEARNED about S-Corps from a Kurdish man working for the water bureau with a long consulting background. He put his car, his daughters' new car, the family cell phones and other things on .... you guessed it: his S-Corp. And occasionally he'd do a gig through his network.

Smart cookie. It took me a couple more years to realize he'd given me a hugely beneficial piece of advice. Unlike him, I've not loaded a car and cell phones and other lifestyle luxuries for my kid onto the S-Corp. Could be that I'm not highbrow enough to afford and lord 'em! :)...

So.... poor li'l corporations. God love 'em. There are them that's taking a loss on the Corps and it's actually benefiting them in terms of overall taxes.

On the other hand, I've discovered that if you do not earn above a certain threshold, you will take a huge asskicking. I got one last year. Had a pretty good consult stint - it was wonderful. But I got ass-kicked at the other end of the year, and I am still not certain how that parsed out and why I ended up being hit into the hole. Perhaps, MP, you are my very best friend and I just don't recognize it. :)...

It pays to lose right in Murrica - and it pays to have a CPA around to explain to you which way you need to win.

I'll be glad to get one of those working on this someday.

Got one more question for you MP: why is it I do not believe that businesses exist out there that are making an honest zero? They would not be in business at that rate, MP. I just cannot believe it, somehow.

"My singular gripe is that corporations must pay a MINIMUM TAX on no taxable income and individual taxpayers do not."

OK, MP, suppose someone is thrilled that they just got hired for a low wage job ($10 per hour or less) at less than full time.

Are you angry that a human gets a standard deduction on their income tax forms?

What do you propose as a min. tax for such people? Writing a check to the Revenue Dept. for 1% of their annual income? Or don't you want to be that specific?

Is there any candidate or elected official who has talked about your proposal?

Are you angry that there is a difference between individual humans paying taxes and companies (legal entitities which do not breathe, never die, don't have the right to vote --only the right to contribute tones of money if they have the resources to do so)?

If you were running for office, would you make that a plank in your platform? How specific would you be?

hehehe... LT....

@rw

Thats the difference between taxable income and profit. Not the same thing. Suppose a company in its first year loses $100,000. In each of the next 4 years it makes $25,000 in taxable income. The IRS and ODOR all said company to use a "Net Operating Loss Carry forward" of their previous years loss. That means they can use their previous losses to offset future profits. You know, the same way an individual can use the sale of stock at a loss to offset gains from another stock sale.

Someone is spamming the TwitterVerse for Dana what's her name who wrote an article here, looks like. Three blatts in a row, all of them organizations with slightly differing names. Shilling her name and the one post. This is crap. Blue organizations should be ashamed of themselves. Contributing to the noise like that.

MP, LT: I'll most likely remain a wage slave the rest of my life if I've gotta figure all this out and THEN strategize around it. Or, in the wake of ten years of showy exposes (mutual funds, banks, mortgage brokers, accounting firms) telling people what the feck they want to tell them... well, it's hard for me to imagine being able to find someone I trust to know that stuff FOR me!

Too much to internalize and act upon.

I leave the dicing of this slice of life to you.

Respectfully Confused, RX

@Greg D

If Company A does what you suggest it will be to the benefit of the state of Oregon. Had they left the income to be taxed at OR Corp rate of 6.6% they would have paid the state $158K. By transferring the money to supplemental wages rec'd, they now are paying 9% or $216K to the state.

mp - Are you forgetting federal corporate income tax if we leave the money in the corporation? 40 percent or better, right? I am one of the 12 chosen ones in my first example.

It still does not make sense that a corp with 8 million in gross receipts pays the same as some mom and pop endeavor that barely breaks even.

@ Greg

at $2.4M you pay a Fed Corp rate of 34% versus a Fed Individual rate of 33% so it is a wash.

As far as the other part, you are comparing apples to oranges. Let me give you another example along your lines: Company A does $2M gross and $100K profit and Company B does $200K gross and $120K profit.

Who should pay more in taxes? A or B

@ LT

Are you angry that a human gets a standard deduction on their income tax forms? NOPE

What do you propose as a min. tax for such people? Writing a check to the Revenue Dept. for 1% of their annual income? Or don't you want to be that specific? $10 until Jan 1, 2010 and then no less than $150.

Is there any candidate or elected official who has talked about your proposal? Not that I am aware of

Are you angry that there is a difference between individual humans paying taxes and companies... Angry is probably to harsh a word...

If you were running for office, would you make that a plank in your platform? How specific would you be? Yup. Very. "No taxable income, no income tax paid"

MP - are you talking absolutely straight and honest accounting, or all the cheap tricks of those who own mega-infrastructures to wash things? It's more complicated than you make it out to be, I keep thinking.

mp

Thank you for the reasonable discussion and, assuming you know what you are talking about, thanks also for the tax information. I have been a shareholder in my corporation for 30 years and they always tell me I must accept year end bonus distributions (which vault me into tax bracket hell not to mention AMT crap) because the alternative would require the corporation to pay obscene state and federal taxes on the undistributed profits. Apparently you have information to the contrary.

But my core point remains. I believe that a company with 8 or 10 million in gross receipts should pay more for the privilege of doing business than a company like my sister's C corp that sells cross-stitch kits on the internet and grosses maybe 2000 a year. And if my sister's company shows a profit of $300 and my law firm shows a profit of -0-, I still believe it would be more fair for the corporation with the larger gross income to pay the larger tax.

Maybe that is just politics, not accounting.

@rw

Tax avoidance is using any and every legal resource to minimize the taxes you pay. For example, you are allowed to claim a mortgage interest deduction on your return. You don't have to but doing so doesn't make you a bad person.

Tax evasion is the general term for efforts to not pay taxes by illegal means. Claiming a $1000 in charitable donations when you didn't make one or not reporting income that you should have.

@Greg D

Given that I know nothing other than what you stated here, I would suggest that it might be worth your time to have a consultation with an independent accountant. He will either confirm that your company is acting in their best interests or suggest some alternate strategies for you. It is possible what they are doing is for the benefit of the company (too many factors I don't know about).

Thanks for the quality conversation...

I am in favor of the idea of business paying a tax based on a percentage of their gross income reported to the State of Oregon. Under this percentage tax, businesses would fall into 3 categories:

1. Low Earners - $250,999 in revenue or less
2. Middle Earners - $251,000 to $1,250,999 in revenue
3. High Earners - $1,251,000+ in revenue

Under my idea, Low Earners would pay a tax of 7.5% of their gross revenue to the State of Oregon, Middle Earners would pay a tax of 9.5% of their gross revenue to the State of Oregon, and High Earners would pay a tax of 10% of their gross revenue to the State of Oregon.

I think this idea is a good start. My numbers may be off and I do apologize as I am no stat nerd or wannabe corporate tycoon, therefore criticize the numbers ad nauseam. However, I believe fervently that a tax based on some sort of percentage of a business's revenue is quite progressive as opposed to this scaling fee that penalizes Joe Schmoe's pet LLC of making vases from his garage.

If you make money, then you should pay back to society what you owe for the interstate highway system, air traffic control system, and intercontinental rail lines that allows you to do business in the first place. I know that our forefathers envisioned and built this wonderful interstate commerce system that was practically given to your business for free. Therefore, what you pay in taxes is a tribute to the past for laying the bricks that allow you to do business across the world today.

On another note, don't come at me with all this accounting gimmicky crapola, I know that line of argument that says, "well business A was just following what the Government said so, therefore if it is not in writing then they did nothing wrong, blah, blah, and blah. WRONG! That is equivalent to saying well, we have no DNA or video tape evidence, but we have a half-blind witness, therefore John Doe is not guilty of murder.

I know this semantics game that cleverly blames Government due to inadvertent loopholes AFTER legislation is enacted and unlike some who comment on this blog, I place the blame squarely on those who are exploiting the loopholes for their advantage. Loophole exploiters are unethical, immoral degenerates!

Oh wait, there would be a tax exemption for businesses making less than $100,000/year in gross income. Business making less than $100,000/year would not pay any tax whatsoever except what they pay when they file as an individual tax payer.

I don't want to be taxing Julie Jane's lemonade stand or Johnny Crockett's candy apple factory.

Without an exemption, my proposed idea would be regressive.

Ryan Leo, the firebreathing hero.

Refreshing post. I fear that you are probably as ignorant as I am, for I agree with you! :)... and I do blame the ones who use the loopholes and know damned well how it is serving them and what they are buying in relief for their CPA's retainer.

I feel an awful sadness when I hear my young son say that he feels no sting at the thought of paying out fully for all that is taken from him: he does not want to act as if he is entitled. He sees injustic around him, the sorrows and complications of poverty. And vows not to be bowed or have his character broken by it himself.

Now that is idealism. Knowing he may well never escape a kind of servitude, but unwilling to imbibe entitlement as his peers already have.

I hope he grows wealthy, my son: and keeps that ideal.

This would make me proud: a rich man who gives all that he REALLY should back to the world in which he had his chances and made them too.

@RyanLeo

Thank God there are people like you advocating for the betterment of Oregon...I mean, who wants a job in the private sector anyway. Your plan just forced almost every business in the state to shut down or move elsewhere.

Try and understand the terms you use before you use them next time. Accounting gimmicky crapola indeed.

MP - how ugly of you. Let's not try to understand why another person may think or feel as they do. Thus far today you've been treated to absolute respect and no battering - by people who do not think as you do.

Have the same courtesy.

Let's think about this: are there any folks who are making a lot who feel it's more than they need, are grateful for every bit of it and feel responsible for giving back more than they are FORCED To by a law? Any of those out there. I'd like to hear the examples. Surely there are some such out there.

... what I mean by that, MP, is that your way of espousing what you believe may sound exactly like crapola to the ones who 1. do not believe as you do; 2. have a different relationship to law and accountability and the spirit of giving and accountability... like that.

Surely you will not be saying that there are loopholes around that are not really equitable to all? Or are you oen of those opportunists who says, "All's fair and let's fight to keep that rathole open"?

I remember a friend learning how incredibly much advantage she was receiving as a home owner, and how she was woman enough never to forget that she was not more deserving than some single mom renter making less than or even the same as she. The only difference, the only reason she had fiscal help above and beyond, was she and her husband could buy a house, which changed their status.

Surely you do not believe that every little opportunity afforded the landed, or the monied, is utterly due them? Egad! Be grateful for them, but recognize them for what they are: the result of laws passed by those in a similar situation to protect that status!

Heck - there's a doctor who spearheaded passing a law that has erased his entire malpractice record, all four categories therein. You ain't gonna tell me he did not have some interest in this outcome? Maybe not his ONLY interest, but it's not a mistake it came to be!

It will be interesting to watch the developments in that state where that legislature just upended its malpractice reporting. It may be they reverse, perhaps they go even deeper, much like CA, where the base reporting threshold is at 50K, and if there was no indemnmity of that much, you will never know there were any cases at all.

The point being, legislators and thier activist constituency who come to hearings and working groups cannot be accused of acting without self interest.

@rw

When someone advocates for forcing almost every business in the state to pay MORE IN TAXES THAN THEY HAVE IN PROFITS, I get a little pissy.

He is advocating a 10% tax on REVENUE, not PROFITS. In most industries, a 10% pre tax profit margin is considered very good, so in effect, he is advocating the destruction of the private sector in this state.

"If you want to create a business registration fee of $150/yr (or whatever) fine, but don't hold different tax paying entities to different standards."

Why not? Most states do hold corporations to a different standard of taxation than they do individuals (including Washington, which doesn't have a personal income tax at all but taxes corporation's gross receipts), taxing financial institutions, retail, wholesale and service industries at different rates, or exempting some sectors from taxes altogether. If your argument is that Oregon shouldn't hold corporations to different standards than individuals, then it's an argument that's moot in my opinion.

Ron, this is an exciting start to my day: someone used the word "moot" correctly. Wish I could hear you say it too. You would surely know to say, "Moooooooooooooooo -t" and not, "MYEWT/Mute".... o my. This is indeed a good day to die.

@Ron

Washington doesn't have a corporate income tax either. The B&O tax has no bearing on taxable income only gross receipts. Apple and oranges.

lestatdelc....my new best friend on BO :-)

It appears that the “Oregon Small Business for Responsible Leadership Steering Committee” is another organization that is a shilling for the labor unions. Every time I’ve been in meetings where Ms. Chin-Ryan has appeared, her union handlers are not far behind. There is little transparency regarding this coalition and where the funding comes from.

Oh, I get it, anyone not part of the business lobby is somehow a front for unions?

How many voters in this state are neither business owners nor union members?

Or is Sparky just so enemy oriented that he can't grasp that concept?

Glad to know she is your wife, Pat.

"Union handlers". Such interesting verbiage. Egad.

Conspiracies.

"Washington doesn't have a corporate income tax either. The B&O tax has no bearing on taxable income only gross receipts. Apple and oranges."

just so, but WA does tax its corporations using a different standard than it does individuals which seems to be your foundational argument here. If I'm misreading your objection, set me straight, but you've said as much several times in several different threads and it's not passing the real-world test.

@Ron

As I have said many times, my gripe is that the state imposes a MINIMUM TAX for INCOME TAX PURPOSES on one tax paying entity that has NO TAXABLE INCOME and does not impose a MINIMUM TAX for INCOME TAX PURPOSES on other tax paying entities with NO TAXABLE INCOME.

Either implement a minimum tax for all income tax purposes or get rid of it for businesses.

MP WRITE IN ALL CAPS ALL YOU WANT!

But policy changes don't happen just by blogging, they must be voted on by legislators AND ALL CAPS ON A BLOG does not guarantee the votes from legislators.

Elect candidates who agree with you. Bend the ear of every elected official you see or contact.

But with this news, we are once again reminded that taxes are not the only factor in business decisions, and other factors than taxes can influence business decisions.

http://www.preemptivekarma.com/archives/2009/09/breaking_portla.html

One more thing: how do you intend to fund government? Or should schools, police and other emergency services, and all other government functions be turned over to private contractors without government regulation?

My guess is you couldn't get many votes for that proposition, given how much deregulation contributed to the economic mess we are now in.

LT

<h2>Just what is my position on taxes?</h2>