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Oregon House Approves Raising Revenue via State's WealthiestSalem-News.com
House Committee Approves Revenue Measures: Plan Calls for Protecting Core Services by Raising Revenue on Wealthiest Corporations and Households.
(SALEM, Ore.) - The House Revenue Committee on Thursday approved two measures that begin to bring greater stability to Oregon’s tax system and help balance the state budget to protect core services including education, health care and public safety by modestly increasing taxes on Oregon’s most profitable corporations and wealthiest households.
House Bill 2649 and HB 3405 were both passed on to the Joint Ways and Means Committee, setting the stage for Ways and Means Co-Chairs to balance the state budget.
“We’ve tightened our belts this session. We’ve made major budget cuts and are finding ways to make tax dollars go further. We are protecting core state services. This revenue plan is needed not just to protect those services, but to bring back some stability to our tax system,” said House Speaker Dave Hunt (D-Clackamas County).
“Our plan is fair. It protects small businesses and middle class families while asking those who are thriving even in this tough economy to pay a little more.”
House Revenue Chair Phil Barnhart said a number of plans were considered, but the plan approved by the committee did the best job of protecting Oregon families and small businesses while allowing the state to protect core services.
The increase in the corporate minimum uses a tiered approach. For a business making with sales in Oregon under $500,000, the new minimum rate is $150.
That’s an increase from the $10 minimum rate that was last changed in the 1930s. It caps at a $100,000 minimum tax payment for companies with Oregon sales over $100 million.
About two-thirds of Oregon businesses currently pay the corporate minimum. The rest pay taxes based on the current corporate income rate of 6.6%.
Under the House revenue plan, the corporate rate increases to 7.9% on net income over $250,000. The rate drops to 7.6% in 2011 and settles permanently on businesses earning over $10 million per year at the 7.6% rate.
On the individual side, families earning less than $250,000 of adjusted gross income will pay no additional taxes. For households earning from $250,000 to $500,000, the current rate of 9% would increase to 10.8% for adjusted income. It increases another 0.2% on income over $500,000. In 2012, the rate would permanently set at 9.9% on income over $250,000.
“This is a fair plan that ensures Oregon households earning less than $250,000 will not pay any additional taxes,” said Rep. Phil Barnhart (D-Eugene). “Yet the dollars it generates will go a long way toward protecting essential services and bringing balance to our tax system.”
The bills now move to the Joint Ways and Means Committee where they are expected to be heard on Friday. Once passed by the Ways and Means Committee, they will move to the floors of the House and Senate.
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