Report: Corporate tax measure won't boost prices
A report published Tuesday by supporters of a corporate tax ballot measure concludes that the price of consumer goods is not dependent on corporate tax rates. Business advocates disagree, saying consumption taxes are paid for through price increases.
Tuesday's report, which compared prices for alike items at stores across the country, showed that prices depend more on regional factors like the cost to transport goods.
For example, the price of chicken was found to be the same at Fred Meyer stores in Oregon, Washington and Idaho, despite the states' widely different corporate taxation rates.
Why Oregon is budgeting for feast — and famine
The report also showed that some large national retailers like Walmart, Kroger, Target, Lowe's and Toys "R" Us have nationwide pricing independent of state and local tax rates.
"Even though these companies clearly pay different amount of taxes in each state it’s remarkable to see how consistent the prices are," said Daniel Morris, Ph.D., co-author of the report and research director of Our Oregon, the union funded group that developed the ballot measure.
The report follows other research critical of the proposed tax, and was paid for by the Oregon Consumer League and Our Oregon.
The Legislative Revenue Office, a nonpartisan state research agency, found that the tax would increase prices. The result would be an effective $600 per capita tax increase felt most by low- and middle-income Oregonians. Our Oregon dismissed the LRO research as based on flawed models.
Ryan Deckert, president of the Oregon Business Association, said he is confident in the LRO research. "We're happy to defer to the official, nonpartisan Legislative Revenue Office," he said. "They're really good economists."
If approved by voters, the measure would create a 2.5 percent tax on corporate sales exceeding $25 million. A handful of large companies would be affected by the tax, and it's predicted to generate more than $3 billion in annual revenue.
Send questions, comments or news tips togfriedman2@statesmanjournal.com or 503-399-6653. Follow on Twitter@GordonRFriedman.