Greater transparency in recipients of corporate tax breaks is something we absolutely need. I have been poring over the last Tax Expenditure Report, and it's extremely difficult to glean any worthwhile information about who is benefiting and how much from any particular tax break.

However, we do know that corporations receive about $470 million in income tax breaks in Oregon every year, and that doesn't include any of the property tax breaks. One big problem with property tax breaks is that the state doesn't divide out how much corporations benefit vs. how much individuals, government, or non-profits benefit.

And then, of corporate tax breaks, how is the benefit being distributed? is it mostly benefiting one company or a handful? That info isn't available either.

Transparency is critical here, and it's just not available. However, it IS in other states such as Oklahoma, Illinois and Wisconsin, so we know it's possible.

hey liberals and pro more tax lovers on this blue oregon site stop with the corporations only pay the 10.00 corporations minimum baloney.start including all the thousands and millions of dollars corporations pay in hidden taxes like fees,system development charges and etc that never gets talked about or included in your arguments for once.stop with the nonsense that vital services will have to be cut if these measures fail.vital services dont need to be cut.the size of the state govt,salaries,benefits pers,the bloated state bureaucracy and all consultants and fat like that need to be cut first.the state can easily cut 733 million now without cutting vital services.cut all state agencies to the absolute bare bone.its time state leaders stood up to their greedy selfish public employee union and pro education crowd buddies for once and told them no.

hey matthew vantress and pro whatever it is you are talking about the corporations fees are different from corporation taxes in the same way license fees are different from,say,property taxes.corporations can easily pay more taxes and why should not more workers do as well as state employees? it's time we the people stood up to corporations and their toadies like you and told you to stop your whining and start doing the work of citizens in a democracy.

And also it might be a good idea to learn how to type something that reads easily on the eyes.

Unfortunately, names of specific corporations who pay only $10 a year are not available. That information is not released by the state - only aggregate statistics.

It is possible to figure out which C corporations paid no state or local taxes in total, last year, based on their annual report, but Oregon won't cough up anything of the sort.

Please don't ask for what you can't get. We are going to have to win this one without it.

"If you've got an S-Corporation, or an LLC, or an LLP, your tax is $150. No matter how big you are."

Just to keep everyone honest (and to head off any strawmen), it should be noted that it IS technically possible to register an LLC as a C-corporation. (I don't know why anyone would do so and I would be suprised if there was a single LLC C-corp in Oregon.)

"vital services dont need to be cut... cut all state agencies to the absolute bare bone"

OK Matthew... what's your suggestion for cuts? It's real easy to throw out sound bytes like "cut the size of state government" without explaining what it means.

So by all means, please identify where this wasteful spending is coming from. Do you think teachers are paid too much? Do you think there are too many prisons? Do you think that projects are financed in a fiscally inefficient way? Because I've really had enough of people randomly perpetuating this myth of "government fat" without any specifics.

Two comments.

1. The claim in the op-ed is that corporations are entitled to deductions that individuals are not and that, therefore, corporation receive favored treatment compared to individuals. This underlying factual base is incorrect. Line 12 of IRS Form 1040 (individual income tax form) requests "business income (or loss)" from Schedule C. Schedule C (Profit or Loss from Business) allows individuals to offset business income with business expenses, just like corporations. The result on line 12 is then included in computing the individual's federal adjusted gross income (Form 1040 line 37). Federal adjusted gross income is then picked up on the Oregon Form 40 (for individuals) on line 8. All of the foregoing applies to individuals, not corporations. The assertions in the op-ed to the contrary are incorrect.

2. Every one of the "profitable" corporations that paid only the $10 minimum tax in 2006 was either (1) not profitable in 2006, (2) profitable, but allowed to offset Oregon tax owed with credits allowed under Oregon law to incent activities the Oregon legislature wanted to incent, or 3) profitable in 2006, but allowed to carry forward an Oregon loss from a prior year, resulting in no Oregon taxable income in 2006.

I know this is a political campaign and people are passionate about the issue, but after the special election, we all still have to get along as neighbors and, if the tax hikes are voted down, the legislature will need all the help they can get to come up with an alternative to the current income tax-reliant tax structure that produces more steady revenue for the state and adequately funds services. Arguments based on mis-stating what the law actually is are not helpful.

Bob Wiggins

Wonderful idea! Really, really, wonderful idea.

Now, if that could be done, you'd be rid of local news casts!

I'm serious. How is the proposal any different than all the complaints that have been leveled at local journalism? How many times have you poo-pooed the idea that the existence of a "personality oriented news format" could only end in scare tactics being the political norm? Not you personally (and I'm tired of bloggers acting like they don't know that "you" being singular and plural is a deficiency of the English language), it was before you showed up.

"When the student is ready, the teacher will appear". Unless of course the student is convinced s(he) already knows everything you don't! Maybe "live by the sword, die by the sword" is more appropriate.

Yeah, it really sucks. It sucks just as much ever night at 10, or whenever.

Oh, I give up. This "all connecting dots is conspiracy theory, let's stare real intently at each pip" is more than I can take!

Sorry if my comments didn't seem responsive.

Bob said: "Line 12 of IRS Form 1040 (individual income tax form) requests 'business income (or loss)' from Schedule C."

Sure, and that's a deduction so long as it's related to my Schedule C business. I think Mr. Setzler's assertion was more referring to the fact that there's almost nothing that a business can't deduct.

Say a business throws a pizza party. Deductible.

Say I throw a pizza party. Does that fit under my Schedule C business? Not likely.

The majority of what I spend money on isn't deductible. Food, rent (the portion that is not my home office), utilities, entertainment, clothing, toilet paper, etc, etc. None of this is (legally) deductible under my Schedule C business.

But businesses would be able to deduct ANY of this stuff.

Hi Guy, I think you're being overly-charitable in your efforts to offer an explanation for Mr. Setzer's assertion. If you throw a pizza party for your customers or employees, you can deduct its cost just like a corporation can. (If you throw a pizza party for your kid's birthday, you're correct, that would not be deductible. But corporations don't have children with birthdays.) Bob

Most <corporate> taxpayers paying the minimum had no income in the current year or used a loss carried forward from another year to result in zero taxable income. Exhibit 3.15 details the reasons for minimum tax payments.

State Corporate Tax Data HERE

The data above refute OCPP's claim and it has been debunked on previous posts.

I would love to see Chuck construct a chart on how he calculates that 5156 number. My guess is he throws in corporations that used a net loss carryforward to offset current year profits and calls them "profitable." As you can see from Exhibit 1.1, the state of Oregon doesn't do that. It specifically removes the net loss deduction in the calculation of taxable income. Hum... interesting.

Mr. S, if I am wrong in my numbers, please show me where.

Anyone with a 97303 zip code could have seen the print Statesman Journal yesterday or go to a library and look at it. The front page was a chart of Company A, B, C and how they would be affected by the tax bills.

Rather than making this about Chuck, MP, I'd love to see you talk about that SJ chart. I have no way of knowing how it looks online, but if there is something wrong with the numbers in the 3 examples, let's hear about it.

Only Company C with lots of sales and lots of taxable income had a large tax increase. The middle company paid the same as before, and Company A, with deductions larger than income--but with $140,000 in sales--had an increase in tax of $140 ($150- the old $10 tax). The way I see it, that means Company A pays a fraction of a percent more in taxes.

Show me where my assumptions are wrong.

Matthew, get help. This is not the product of a sound mind. BO will give you no satisfucktion.

"A wasted mind is a terrible thing" - Dan Quayle

wasteful spending?ok consultants,salaries,pers,paying all state workers health care premiums,the state bureaucracy,odot,paying for non citizens anchor babies healthcare,the size of the state govt.covered bridge committee,ginseng advisory committee,cultural trust,dmv employees standing around and doing nothing.their is plenty to cut in state govt folks.did i give you enough areas?

"did i give you enough areas?"

This is nearly just as broad as ever... but a bit more specific, so let's break it down.

consultants: This is an area where you can suggest something epecific. Are there particular consultants you feel should be cut?

salaries: OK, the old saw of "cut state workers' salaries." Fact is though, many are making under market already, and if you don't want to cut services (as you said above), you'll need to find another incentive to keep them around. Which brings me to...

pers/health care: So what's your plan? Cut state workers salaries and benefits and pension WITHOUT cutting vital services? Gee, maybe after there are no more state employees we can have robots provide all those essential services you didn't want cut.

the state bureaucracy: Ah. This is, like, the most overly-broad statement ever. Do you think that there's a budget line item that says "the bureaucracy"?

ODOT: Where? Their operating budget? Their financing mechanisms? The highway tax? ODOT is a big agency because it maintains a lot of roads and highways. If you want to cut their project capacity, please identify which roads and highway projects you'd cut back on.

anchor babies healthcare: (Ah, there it is.) Guess what - you're paying for their healthcare anyway if they go to the emergency room. I'm sorry you don't support the Constitution and don't regard children born in the United States as citizens, but the issue of rising health care costs is a subject of a different thread.

covered bridge committee: ODOT advisory committees are already required to confine themselves to available funds. This particular committee helps coordinate an inspection program to ensure that these bridges don't fall down while someone's driving on them. If you want to cut it, you'll save no money and inspections and upkeep of these bridges will either A) not happen, or B) happen, but more expensively since expertise will have to be sought out or the bridges replaced.

ginseng advisory committee: OK, this is weird, but it wouldn't really affect the state budget since it's funded through fees on ginseng growers/dealers. I could speculate that the Department of Agriculture wanted to have a handle on ginseng because of potential debilitating side effects when taken to an extreme degree, but again - not really a budget issue.

cultural trust: Hmm... This is funded through private donations and tax credits, isn't it? So you want to cut the Cultural Trust and eliminate those tax breaks? ... and with it the leveraged private donations and grants that go towards every corner of the state?

dmv employees standing around and doing nothing: Seriously? Did you alert the ODOT office that there was a DMV office somewhere not fulfilling its duties? Anyway, DMV is funded through fees, not the state budget. So although we ALL like to gripe about DMV service... it's not really affecting the general fund.

Thanks for playing though.

Damn Chuck, why didn't you say you were comparing apples to oranges all along. Since this entire month long debate was about TAXES, I and others assumed you were talking about TAXABLE INCOME. Silly us, since there isn't a single corporation in the United States that pays taxes on their "profits" only on their "taxable income."

LT

The problem with the SJ chart is that, as best as I can tell, they pulled numbers out of thin air to make hypothetical companies (my guess is they did so to fit their POV). So here is an example of a real Oregon company:

Mentor Graphics (12 months ending 01/31/2009) Rev: $790M Profit: -$70M Taxable Income: -$78M

Old tax: $10 New tax: $100,000

Given that our tax system is based on ones ability to pay, I would suggest a company that lost $70,000,000 real US Dollars for the year has little "ability to pay"

Speaking of "pulling numbers", you don't mention sales or deductions. You mention "revenue" and that their profit is in the minus territory.

Are you saying "vote no on the measures because sales and deductions don't matter"?

I've been having email exchanges with a friend who owns a small business and had not had a lot of time to understand the issues involved. So he asked me. And I explained, as well as sending him the link to the LRO report.

His response today was that claims like "many businesses would close their doors and not be able to afford the taxes" were sensational.

If Mentor Graphics has low sales or high overhead and that is why their profits are down (information you do not provide) and their taxes were slashed but the sales continued to be low and the overhead continued to be high, how long would they stay in business?

It is time to have a rational discussion---one which includes facts like sales, deductions, and other details.

Many people are tired of "accept our point of view and don't ask questions" politics---from anyone!

Chuck, I agree with you that a wage earner whose household expenses are greater than his after-tax wages is in big trouble. (And of course, if he loses his job he's even worse off.)

The op-ed, however, very clearly distinguished between corporations and individuals, not between businesses and wage earners. On Oregonlive, in the comments, after I called the author on the factual inaccuracy of his assertion, he even reiterated that that was the distinction he was making. He wrote: "I was comparing individuals to corporations. I was not comparing corporations with the other forms of business enterprise. I stand by my analysis." You can say after-the-fact that he meant something different from what he wrote, but what he wrote was factually wrong.

If he really meant what you say he meant--a comparison of businesses and wage earners--I guess my next question would be: then what is the point of the op-ed? Since the beginning of the income tax, businesses have been entitled to offset cost of goods sold and business expenses against revenue to compute taxable income. Businesses and non-businesses are entitled to offset capital losses against capital gains, and to deduct the costs associated with income-producing activities like owning rental properties. And every kind of taxpayer is entitled to offset the basis of property sold against sales proceeds. This seems to me to be an attempt to make people who don't understand how the income tax works to think that "corporations" are somehow getting some kind of sweet deal, so it is only fair to jack up their taxes. Either that, or Mr. Setzler believes Oregon should have a gross receipts tax on businesses (like Washington), not an income tax. (Of course, if the corporate tax increase becomes law, Oregon will have both an income tax and a gross receipts tax--through the minimum tax on C corporations.)

Either way, I'm trying to at least inject facts into the discussion. Bob Wiggins

LT

Here's a link to Mentor Graphics entire financials, knock yourself out...

here

Just click on the ANNUAL DATA tab to see the numbers I quoted.

MP, thanks for the link. You said, "The problem with the SJ chart is that, as best as I can tell, they pulled numbers out of thin air to make hypothetical companies (my guess is they did so to fit their POV). So here is an example of a real Oregon company"

What I found on that link you so nicely provided:

In Millions of USD (except for per share items)
3 months ending 2009-07-31 Revenue 182.62 Gross Profit 149.66 Total Operating Expense 194.12

Total Operating Expense is roughly $12 million more than Revenue. For this reason, we should a) not believe the SJ chart, b) vote no on the measures in January?

Why?

LT

Do you believe in a progressive tax system based on one ability to pay?

Yes, but with "total operating expense" being larger than profit, if MG had a 0 tax bill but continued to have overhead larger than revenue, how long would they survive?

Which leads to the opening line below the link, "While citizens pay taxes on most of their income, corporations get deductions for nearly everything they buy. "

Someone laid off who is paid unemployment benefits will not have the benefits taxed if the tax measures pass because an end to the taxes on unemployment benefits is part of the measure.

There is an old joke that anyone running a company who has a major tax bill should fire his accountant because he is not getting all possible tax breaks.

A company with Operating Expense roughly $12 more than revenue is doing something wrong--deducting EVERYTHING or not paying attention to their overhead costs. We are supposed to have sympathy for such a company because.....

Now MP, if you have a plan to fill the budget hole that voting no on the measures would create, I'm sure we'd all like to read it and debate your plan.

But I trust the SJ chart--sounds like the LRO numbers--and I know people who work for the SJ. I trust people I know over people I don't know.

If you really live in the 97303 zip code, you might want to attend the next Salem City Club luncheon. I hear there will be a debate between Steve Novick and Pat McCormick.

ill tell you where lt where the govt can get the money to replace the 733 million that they will lose when these tax measures are soundly defeated in january.salaries,pers,all money the millions of dollars spent on consultants and get rid of all consultants too.,a 50% cut in the size of the state govt and bureaucracy.lets have all state workers pay at least 100.00 a month for their medical premiums like us in the private sector have had too.trim generous benefits and bloated pension money for state workers.its time the state lwearned to live with what they get now and learn to ciope with less like the private sector has had to.consultants are fat the state govt can live fine without.

http://www.oregonlive.com/news/oregonian/steve_duin/index.ssf/2009/10/lobbying_to_overturn_oregon_ta.html

is a great Steve Duin column.

Matthew, would you be OK with having ALL public employees (including legislators) on exactly the same health care plan with exactly the same payment structure?

I was talking to a reporter friend today who isn't sure legislators pay much more of their health care expenses than ordinary public employees.

Nice info, Useful for my job...this has made my life (my projects) goes a lot easier. Keep up the good work, thanks very much... :)

lets have all state workers pay at least 100.00 a month for their medical premiums like us in the private sector have had too

OK... in the midst of the overly broad vague ranting, Matthew has actually called out a specific proposal. Even though he's basically just asking for a salary cut of $100/month for every public employee.

What's that? It's already been done in the form of furloughs? By the Democrats?! I guess you're kinda behind the times on this one, Matthew.

Here's what you do. Go to http://www.leg.state.or.us. Go to "bills and laws" (2009 session) and pull up all the budget bills. (They are numbered either HB50XX or SB55XX.) If you need details on the budgets for each bill, go to "committees" and search for the fiscal report on each bill.

Let us know SPECIFICALLY what budget line items you would either 1) not pass, or 2) pass, but at a lower amount. If (2), please let us know what the lower amount would be.

Because rolling into town and yelling "consultants are bad! cut state government" isn't really helping anyone.

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