Another business succumbs to "job-killing" taxes. Not.
Kari Chisholm
Rep. Kevin Cameron (R-Salem) was one of those Chicken Littles who predicted that the sky would fall if Oregonians voted to raise taxes on wealthy individuals and C-corporations.
Here's what Cameron wrote in his legislative newsletter in July 2009:
[Businesses] will have to raise prices or cut jobs in order to pay these taxes. ... The so called 'fair taxes' are job killers!
In his day job, Kevin Cameron is the founder and CEO of Café Today Restaurants and catering. So, what's been the impact on Café Today of measures 66 and 67?
From the Statesman-Journal, last week:
Café Today Catering, which has several locations in Salem, has decided to open a new location in Portland, said Bill Leisses, the company’s catering director. He described Café Today’s business as steady, and the company has hired one new employee.
I'm glad that another Oregon business is doing well in this economy. Hopefully Rep. Cameron will acknowledge the contradiction between his rhetoric and his reality -- and think twice next time before using bumper-sticker slogans instead of economic analysis.
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connect with blueoregon
5:15 p.m.
May 17, '10
Kari,
The biggest problem right now, in my opinion, is the utter lack of trust between a large contingency of Oregon's business community and state government. Even if a majority of Oregon businesses are not negatively impacted by 66 & 67, there's a perception out there that Oregon's political leadership favors raising taxes, and cares more about funding social programs, than helping businesses thrive and provide family-wage jobs.
I'm not saying it's reality, but as we all know, perception is reality. The state's next governor and legislative body has a lot of work to do to overcome that perception.
5:49 p.m.
May 17, '10
And how do you overcome that perception when it isn't based on a valid arguments or realities?
10:10 p.m.
May 17, '10
Oregon's taxes on business are among the lowest in the land - according to an organization that lobbies against high business taxes on behalf of major corporations.
So Mitch raises an interesting question: How do you combat a perception that isn't based on reality?
I'll raise a second interesting question: Is Oregon unique in this regard? Is there a state where the businesses say, "Gee, the political leadership here is just groovy - taxes here are plenty low, and we're all happy campers!" Does such a state exist? Or is it merely a universal characteristic of business lobbyists to bitch and moan about whatever they perceive as impediments to business (whether real or imagined)?
6:53 p.m.
May 17, '10
Jason, I'm not convinced that there's a lack of trust between rank-and-file businesses and state government. What I see at work is a constant and relentless drum-beat from the right (including, but certainly not limited to, main-stream business groups, chambers of commerce, etc.) against any and all taxes, especially those which are progressive or which aim to reduce the problem of radical income disparity which has reached all-time highs during the Bush years. No new tax is reasonable, or appropriate, ever. Government can NEVER help ANY problem, except by cutting taxes and beating up on public employee unions.
This extremist view point is certainly NOT held by a majority of those employed by Oregon-based businesses. It may be held by a majority of business owners but I wouldn't want to assert that without solid evidence. And even if that were the case, I would see that as more of the bankrupt, "I've got mine, to heck with everyone else!" extremist ideology of hard right, not the progressive majority which increasingly wins state-wide and many local elections in Oregon.
Oregon voters passed 66 & 67 by wider margins than almost anyone expected. Virtually all GOP candidates opposed them. In the fall, their deaf, dumb and blind attitude will hopefully earn them what they deserve--a one-way trip to their own personal nirvana: the private sector!
6:38 a.m.
May 18, '10
What! Taxes should be progressive and should go up. Government is not an arm of business, there to assist businesses to make profit.
8:33 a.m.
May 18, '10
Interesting that you place all of the burden for that on the elected officials. Any chance that maybe AOI and the CoC have some work to do?
7:18 a.m.
May 18, '10
As a constituent of Kevin Cameron's I would say I have yet to hear him say anything that connects rhetoric with reality. Ideology trumps reality every time with the GOP. It wasn't always that way but it is now. They tune in to Limbaugh, Frank Luntz, and Fox News for their daily talking points and that is their reality.
8:53 a.m.
May 18, '10
Jay,
Business owners are upset that lawmakers would even consider raising taxes (at any level) during one of the worst recessions our state and country has ever seen. Their argument and concern is, "What's next? How else am I going to be taxed in the future? If lawmakers are willing to raise taxes in a recession, imagine what will happen in good times?"
Many in the business community believe the tax increases were a knee-jerk reaction to the economic downturn and budget shortfalls, instead of having real, honest debate about tax reform, rather than tax increases.
Yes, I agree, and data proves that Oregon has one of the lowest overall tax burdens in the country (except for income tax and capital gains). But that's not the point. To the business community it's about keeping Oregon's tax burden low, and most business advocates believe any move to harm that, is a move in the wrong direction.
You said: "What I see at work is a constant and relentless drum-beat from the right (including, but certainly not limited to, main-stream business groups, chambers of commerce, etc.) against any and all taxes, especially those which are progressive or which aim to reduce the problem of radical income disparity which has reached all-time highs during the Bush years. No new tax is reasonable, or appropriate, ever. Government can NEVER help ANY problem, except by cutting taxes and beating up on public employee unions."
Your statement points to a true philosophical divide between progressives and a majority of the business community in our state about the role of government. Many business owners believe lawmakers could've made more cuts to programs and staffing levels, but chose not do so saying essential human welfare services would be cut. Again, a difference in terms of what role, and at what level, government should play in society.
As for the perception issues...even Kitzhaber admits it exists. During the debate on KGW with Bradbury, he said the next Governor will have a lot of work to do to repair relationships between government and business.
Maybe you don't see the divide or the distrust. But as someone who works closely with businesses, I can tell you that it exists.
9:00 a.m.
May 18, '10
As one of the "chicken littles", I will respond.
"Bumper sticker slogans" are no substitute for analysis. Neither are anecdotes about a small restaurant chain that happens to still be in business. The fact that Cameron's restaurants are not out of business does not mean that Measures 66 and 67 will not have an impact on employment.
Thanks to Measure 66, Oregon has the highest state income tax rate in the country. That's a fact, not just bellyaching. The good news (from your perspective) is that Washington is circulating an initiative petition that would create a state income tax on high income Washingtonians almost as high as Oregon's. If that becomes law (and I think that the Washington public employee unions have a pretty good roadmap on how to make that happen, based on their success in Oregon), then Washington becomes a much less attractive place to move. I suspect many people are waiting to see what happens there before they pull the trigger on a move.
I am so tired of the COST study being trotted out by you guys to assert that Oregon has low business taxes. The COST study showed that "business" in Oregon (and every other state) pays more in taxes than it receives in benefits. That's what the study concluded. I never see the pro-high tax crowd mention that point. In addition, the COST study made estimates for taxes paid by owners of S corporations that it did not have actual state-by-state information to support. The estimates assumed that pass-through income in each state matches Schedule C income for the state. This assumption doesn't make any difference for the purpose of the study, but it may make a lot of difference for the purpose of comparing individual states.
The M 66/67 election is over. You won. However, it's way to soon to know what the impact of that decision will be.
12:16 p.m.
May 18, '10
And that is the short-sightedness of the business community. "Cuts in Government spending" means you are firing your customers. Money spent on public services do not just disappear into the ether. They get spent in the private sector economy directly or indirectly.
Even Henry Ford knew enough that his workers were his customers (directly or indirectly). That is the artificial division in the thinking which the right-wing have brow-beat into the public zeitgeist.
The money the government (be it Federal, State or local) spends somehow doesn't get put right back into the economy is a talking point firmly embedded in culture, but is fundamentally untrue.
It is even more ironic given that when it comes to lower income people. Because those who are most helped when taxes are made more progressive, i.e. low-income folks, the more money which goes into the the pock of a low income person gets directly out into the economy because they spend it on goods and services instead of saving it.
Do these business people somehow think that members of the Teacher Union for example, don't shop at Fred Meyer? They don't eat in the local restaurants? They don't buy cars at local dealerships, and so on?
Why businesses want to fire their customers who spend the most is truly baffling phenomenon.
8:13 p.m.
May 27, '10
Your argument implies there is no reason to limit taxes. The more you tax, the more your customers will buy. We know that doesn't make sense.
There needs to be a balance, and tax money needs to be spent wisely and efficiently just as private money does. Many of us don't believe that the government knows how to do that; we see it in action every day. People in power appear to always be inclined to spend more.
9:38 a.m.
May 18, '10
Bob, I'd agree that what happens at Cafe Today offers no substantial evidence of the cumulative impact of M66/67, and that the impacts won't be known for years.
Yet the burden of proof is on those who claimed, as Rep. Cameron did, that these were job-killing measures (for example, one defending Cameron could provide evidence that Cafe Today would have expanded even more, were it not for these small tax changes).
If we're going to be fair, it is irresponsible to single out income tax rates and hold that up as a bumper sticker talking-point. What people will consider is overall tax burden, quality of workforce, quality of life, and services provided, not simply one tax rate.
The COST Study comes from a source that lobbies on these issues. While you might quibble with some small details, can we at least we can agree that Oregon is not a high-tax state for business, relative to others? Or would you like to offer a different study?
10:43 a.m.
May 18, '10
The reason why the Cafe Today anecdotal evidence is meaningful is that so many opponents of M66/67 jumped on the "I'm a small business owner, and trust me, this will hurt me" bandwagon.
1:06 p.m.
May 18, '10
Evan, we cannot agree that Oregon is not a high-tax state for businesses, and here's why. The "studies" everyone cites looks at averages. The mix of taxes affect actual businesses differently. If you are an Oregon business that benefits from the state's very generous tax credits--such as BETC--then, yes, you probably have a relatively Oregon tax burden. If your business is a large multi-national with low sales in Oregon, because of single-factor apportionment and no sales tax, again, you probably have a relatively low Oregon tax burden. But if your business is a profitable S corporation that doesn't use much tangible personal property, Oregon is tax hell because of the high personal income tax rate. And if you have a profitable C corporation whose sales are mostly in Oregon, again, Oregon can be pretty ugly. Most of the businesses that are really considering moving out of Oregon (not just making noise on the radio) are going to be quiet about it--until the decision is final there is no need to worry employees and vendors. But you are wrong to think that Oregon's tax structure is not a very real problem for a number of very real businesses that currently employ very real Oregonians.
2:29 p.m.
May 18, '10
Thanks for clearing that up, Bob. Given that M 66/67 didn't radically change our tax structure, but adjusted some of the rates, it seems that the types of businesses you cite had already made the decision to be or not to be in Oregon before the measures.
If you can provide some evidence of businesses deciding the costs of moving are less than the costs of staying, due to the marginal increase in tax burden, it would be valuable to see.
9:45 a.m.
May 18, '10
State tax revenues in OR increased 1.9% for 2009, one of only five states to see an increase. This wouldn't include 66/67 since they will be collected in 2010.
10:11 a.m.
May 18, '10
Given that Oregon has seen some of the worst unemployment--and hence the biggest drain on public services to assist those out of work, I'm glad to see that our state is responding to that need.
In a recession, its much worse to cut spending than to raise taxes.
Case in point:
http://www.honoluluadvertiser.com/article/20100311/NEWS01/3110344/Budget-cuts-may-be-amplifying-recession-in-Hawaii
7:55 a.m.
May 19, '10
Thank you, Carla. This certainly bears repeating:
In a recession, its much worse to cut spending than to raise taxes.
8:15 p.m.
May 27, '10
With that thinking, we are in for a very long recession.
11:03 a.m.
May 18, '10
April employment increased by 3,900, the biggest monthly gain in two-and-a-half years.Unemployment remained unchanged at 10.6%. This unemployment rate is below California and Nevada, but above Washington State.
11:47 a.m.
May 18, '10
This post highlights a bigger question to me, the utter toxicity of our political culture. Our public discussion of policy issues, especially when it is done by office holders or office seekers, and their advocates, is utterly dishonest. Everything is said as a calculation for the impact it may have regardless of its relationships to facts. No argument concedes that any other side has anything of value to say. Public political discussion has turned into a propaganda war of talking points, where no side is permitted to change views or yield ground without it being seen as weakness. As a constituent I find Kevin Cameron utterly lacking in credibility because his public statements are so predictable and so completely framed by ideology. That was not always so in Oregon.
11:53 a.m.
May 18, '10
For those that don't know Cameron is going to have a formidable challenger this November. I would urge you all to take some time to support Claudia Kyle's campaign: http://claudiakyle.com/
12:29 p.m.
May 18, '10
I don't know about toxicity of political culture, but I do know that I am hearing a lot of garbage from the businesses since we have begun to push back. They act like they are doing us all a big favor as they make a profit. They want to be shielded from exposure from their own mistakes. They want government to do all manner of things to make things work better for them, and don't really care about the pubic impact. They totally dump on government employees as if they were a bunch of imbeciles. Of course these are generalities but listen to the tenor and tone of the Oregonian, the chambers of commerce, some of the writers on this post. Oh the poor hurt feelings of those neglected heroes of industry. Sorry, I have been a business owner for nearly 30 years. I hold my own. I support social justice. I look to my family for love and respect. (I didn't vote for Kitzhaber because I think the kind of comment quoted was ridiculous.)
1:43 p.m.
May 18, '10
I, like many of you try to spend my money with businesses that share my values. For example, I’m more likely to support a locally owned restaurant which utilizes local organic plant-based food opposed to say a national chain which uses factory-farmed chemically produced food. I try to keep my money out of the hands of business owners who have supported conservative/republican/right-wing public policy/politicians. I would rather Phil Knight not use my money to kill funding for education and other vital public services. I would rather go to a dentist who will write a check to a Democratic campaign instead of a Republican one. Which brings me to my question: Wouldn’t it be nice to have something like a Progressive Business Directory which would help keep progressive’s money in the hands of other progressive people/businesses? In a blue city like Portland it seems something like this could produce significant results. Let the free-market work.
2:06 p.m.
May 18, '10
Bill,
You make a great point.
Joshua,
While I respect your opinion, I believe your observation and logic to be completely ignorant and judgmental. We should all do business together as Oregonians despite our differences.
2:28 p.m.
May 18, '10
Really?
So you think that it is wrong for Oregonian's to spend their money buying products made by businesses that support the local employment and local sustainable sources instead of outsourcing and off-shoring their jobs out-of-state and oversees?
Seems the ignorance and judgmental attitude isn't Joshua's comment.
8:19 p.m.
May 27, '10
Could you explain the 'buy local' argument for me? I have never understood that. If you take the argument to it's end, you will grow your own food, grow your own trees to build your own house, perform health care on yourself, etc.
2:45 p.m.
May 18, '10
Frankly Jason, I don’t care if you respect my opinion. And what exactly is wrong with making thoughtful judgments? We all make judgments whether we are choosing our friends or our politicians. It’s called progress.
Why don’t you try to give an explanation as to how my logic is “ignorant” or do you like to spew unsupported nonsense? Why would I want to give my money to a right-winger who will in turn have more money to spend on right-wing causes especially if I can get the same product/service from someone who contributes to/supports progressive causes?
Do you not recognize that our consumer choices have moral implications? Do you not mind funding businesses that make their profits by exploiting impoverished people in developing nations?
3:55 p.m.
May 20, '10
Oregon fell 14 spots to No. 38 -- the biggest drop of any state -- in Chief Executive magazine's annual survey of Best and Worst States for Business. Oregon got a D in the tax and regulation category, an A- for its living environment and a B- in workforce quality. Tip of the Iceberg.