Tax and Fiscal Policy

Background

In light of Oregon’s precarious economic outlook, the shocking losses in private sector employment over the past year, and the state’s soaring state and local tax burden, OBI’s Tax and Fiscal Policy Principles will encourage aggressive changes to Oregon’s tax code that decrease the state’s tax burden and make it less complex. OBI’s priorities will focus on protecting Oregon’s employers and their employees by working to stop all attempts to raise existing taxes, create new taxes, or reduce or eliminate important tax incentive programs. OBI will continue its work to mitigate the effects of recent tax increases and work to improve Oregon’s competitive position through proactive tax, incentive and regulatory modernization.

Similarly, OBI will continue to advocate for clear-headed restraint related to public spending for new or expanded state programs and services. OBI will continue to urge lawmakers to prioritize spending based on current revenue sources (and realistic expectations of future revenue streams). OBI will not support any new or expanded programs requiring new or expanded revenue (tax) sources.

Tax and Fiscal Policy Principles

Do No Harm: OBI will oppose all temporary and permanent business tax increases. Recognizing the tax and inflationary burdens on individual taxpayers and families, including pass-through business entities, OBI also opposes temporary and permanent increases to the Oregon personal income tax, state payroll taxes and local taxes.

Estate Tax: OBI will support efforts to reduce Oregon’s estate tax burden, seeking to align it with other states and national norms.

Federal Connection: OBI will work to maintain the state’s automatic connection to federal tax code, and especially the definition for taxable income, unless there is a good business reason to disconnect.

Government Procurement Protocols: OBI opposes the imposition of unnecessary or unduly burdensome requirements on governmental purchasing protocols.

Gross Receipts Taxes: OBI will oppose increases to the corporate activity tax. OBI will support efforts to address its adverse impacts on businesses and support efforts to reduce its pyramiding effects. OBI opposes the imposition of additional state and local gross receipts taxes.

Improve Competitiveness: OBI will work to improve Oregon’s competitive position relative to other states.

Incentives and Credits: OBI will support tax credits and incentives for economic development and business investment. Those tax credits and incentives should use best practices from other states to improve Oregon’s competitiveness and provide tangible returns on investments made by Oregon’s businesses. For example, OBI supports, among many others, the repassage of the long-expired research and development tax credit, a new investment tax credit and a new tax credit for employer investments in workforce or childcare.

Indexing Brackets and Thresholds: Recognizing Oregon’s current tax system imposes annual increases to the tax burden borne by individuals and businesses by largely failing to index brackets and thresholds to inflation, OBI strongly supports indexing the amounts at which the state imposes taxes to inflation.

Innovation and Growth: OBI will promote innovation and economic growth. OBI will promote public policies that support job creation, private investment, innovation, employer retention and a positive business climate. We recognize that a thriving private sector is the best way to sustainably support and fully fund Oregon’s critical public sector needs.

Kicker: OBI will work to protect Oregon’s personal kicker tax rebate program. Any change to how Oregon’s corporate kicker is allocated should be agreed to by the state’s industry stakeholders.

Legacy Programs: OBI will urge the Legislature to look for ways to reduce the cost of legacy programs, such as PERS and PEBB, that affect the budgets of state and local governments.

Long-Term Forecasting: OBI will support the use of long-term budget forecasting and planning (5-10 years), which will allow lawmakers to better weigh program priorities and required funding.

New Initiatives: OBI will oppose or seek to delay costly new initiatives with little discernable benefit for employers and employees.

Prioritization: OBI will support the prioritization of existing critical programs. OBI will support preserving ending balances and reserve funds for the maintenance of critical state services in future biennia and/or economic emergencies.

Property Tax: OBI will oppose any effort to change Oregon’s property tax structure that fails to recognize the holistic tax and fee burden placed on individuals and businesses. OBI especially opposes changes to Oregon’s property tax system that would disrupt the balance between commercial property taxpayers and residential property taxpayers. OBI supports property tax exemptions for both real and personal property that encourage businesses to make investments in Oregon.

Spending Restraint: OBI will encourage lawmakers to carefully manage the state’s general fund resources and significant cash reserves. The state’s resources should be invested carefully in critical state services, allocated sustainably to ensure stable funding for future biennia and used prudently to protect against any potential revenue shortfalls.

Tax Consistency: OBI will support the alignment of state and local tax structures and compliance requirements.