The share of Oregon income taxes paid by corporations has declined dramatically over the last four decades, from 18.5 percent in 1975 to 6.7 percent today, according to a report released this week by a Portland think tank that advocates for progressive tax policies.
"Corporate income tax contributions have declined to such an extent that the Oregon Lottery now brings in more revenue," the Oregon Center for Public Policy wrote in the report.
The report did not say whether the dollar amount of corporate income taxes had declined over the years, but the authors cited state forecasts that corporate income taxes will remain static at $1.13 billion per biennium through 2025. During the same time period, economists expect personal income tax revenue will increase by 49 percent to $23.4 billion in the 2023-2025 biennium, according to the report.
The report attributes much of the decline to companies "obtaining numerous tax subsidies and loopholes at both the state and federal level."
The finding may add more heat to what's increasingly become a fiery debate over a $3 billion tax measure headed to November's ballot. The measure, known as Initiative Petition 28, would charge certain C corporations a 2.5 percent tax on their gross sales in Oregon above $25 million.
Juan Carlos Ordonez, communications director for the Oregon Center for Public Policy, said the group wanted to release the report "at a time when Oregonians are weighing one of the most controversial measures to be on the ballot."
The observation that the state's share of corporate tax revenues has declined is not new.
"It's happened in Oregon, it's happened at the federal level," said Paul Warner, the state's legislative revenue officer. "You can go back to a peak in corporate taxes in the 1950s."
Warner said there are a variety of reasons people cite for the decline, from states competing to attract companies by offering tax breaks, to companies structured to pass profits through to owners and shareholders who report the profits on their personal income tax returns.
The report also listed offshore tax havens as a factor in Oregon's tax decline. Oregon lawmakers passed a bill in 2013 to crack down on the use of offshore tax havens, but Ordonez said "it's clear we still have a long way to go to address the problem."
An economic analysis released by state economists in May suggested some companies would pass the proposed gross receipts increase to consumers in the form of higher prices, although economists estimated the tax would raise prices by just under 1 percent over the next five years.
A separate report from Oregon's Office of Economic Analysis, published by The Oregonian/OregonLive on June 8, said more than 200 Oregon-based corporations covered by the tax measure could see their annual bills grow from an average of $200,000 to $2.2 million.
-- Hillary Borrud
503-294-4034; @hborrud