Oct. 30, 2025
Oregon has fallen two places in the nonpartisan Tax Foundation’s State Tax Competitiveness Index, dropping from 33rd to 35th, the state’s lowest ranking in the widely followed index in at least 20 years. Oregon has fallen an astounding 28 places since 2019, when the state ranked 7th.
“Oregon’s declining performance in national competitiveness rankings has become an alarming trend, but that trend simply reflects the economic conditions Oregon’s businesses have warned policymakers about for years,” said OBI President and CEO Angela Wilhelms. “Oregon has become a very difficult place to operate a business. That difficulty often translates into higher costs, which means higher prices for consumers, less investment in workers or both.”
Earlier this year, Oregon plummeted 11 places in CNBC’s America’s Top States for Business rankings, falling from 28th place to 39th. Oregon’s overall score in that index is its lowest in the history of CNBC’s rankings and a stunning 22 places lower than its 17th-place ranking in 2017.
In addition to an overall score, the Tax Foundation ranks each state in five categories. In only one of these, sales taxes (4th), is Oregon among the top half of states. Other rankings include property and wealth taxes (28th), unemployment insurance taxes (41st), individual income taxes (41st) and corporate taxes (49th).
“For the second year in a row,” the Tax Foundation wrote, “Oregon’s rank dropped due to competitive reforms in other states as Oregon stood still.”
The organization also warned about the possibility of self-imposed damage.
“At the time of publication,” it wrote, “Oregon lawmakers were considering changes in conformity to the federal Internal Revenue Code that could further harm the state’s tax competitiveness in future years.”
“This year’s State Tax Competitiveness Index is the latest of many signs state policymakers can no longer afford to dismiss,” said Wilhelms. “Oregon is systematically unraveling competitive advantages. The state’s business climate is chasing away investment, and that means fewer good jobs for Oregonians, less philanthropic support for Oregon’s communities and less revenue for public services.”
Other warning signs include:
- Oregon’s year-over-year GDP growth significantly lags U.S. GDP growth
- The state economist has stated that Oregon is in the midst of a manufacturing recession
- Oregon’s population has stagnated and is expected to increase by an annual rate of only 0.4% between 2024 and 2025
- Oregon’s total effective business tax burden increased by one third between 2019 and 2023, eroding a historic competitive advantage
- Oregon is the 7th most heavily regulated state in the nation, with regulatory growth restricting job creation and raising prices
“There is no reason Oregon cannot and should not be a beacon of opportunity for workers and businesses, but we must get out of our own way. Policymakers must reverse this anti-competitive and costly trend,” said Wilhelms. “To do that, they must first recognize the problem. Then they must resolve to stop making it worse and, crucially, make economic development a top priority.”