Look closely at IP28; a bad idea can never help a good cause
Oregon consumers and small businesses should be very concerned about Initiative Petition 28, a proposed $6 billion tax increase that will be on the November ballot.
IP28 would create a new 2.5 percent tax on the Oregon sales not profits of businesses organized as C-Corps which generate $25 million or more in sales. If passed, IP28 would move an additional $6 billion in tax revenue into Oregons General Fund every two years, and would increase total state taxes by approximately 25 percent the largest tax hike in Oregon history.
The Portland Business Alliance, where I serve as chair-elect, has joined a coalition of more than 3,000 individuals, organizations and businesses from across Oregon that share deep concerns about this costly and damaging proposal.
The measure is opposed by all members of the coalition and many political leaders. I encourage you to join us and heres why:
1. The tax would cost Oregon consumers hundreds of dollars each year.
The nonpartisan Legislative Revenue Office, in an independent report, found that this tax on Oregon sales would largely act as a consumption tax, with roughly two-thirds of the cost passed through to consumers in the form of higher prices for every day essentials like groceries, insurance, medicine, gas, utilities and more.
That same report estimates the tax would cost the average Oregon household $600 per year, and Oregons lowest-income residents would be hit the hardest.
2. Its a tax on a tax.
While a traditional sales tax is levied once at the final point of sale, IP28 includes no such safeguards. In fact, the tax could be levied multiple times during the products manufacturing, distribution and retail sales process, so by the time it reaches the consumer the product could have been taxed two, three, even four times, making products and services that much more expensive to Oregonians.
3. It would cost jobs.
The Legislative Revenue Office projects this proposal would cost some 38,000 private-sector jobs. Businesses would be forced to pay the tax regardless of whether they make a profit, putting many in the difficult position of having to decide whether to raise prices, cut jobs or do both.
4. Small businesses would suffer.
The proponents argue that only big businesses would pay the tax, but the truth is that every business in Oregon would be hit, and small businesses would be hit the hardest. Small businesses buy electricity, insurance and professional services from companies that would be directly impacted by the tax and, just like individual consumers and families, they could expect those costs to go up as the cost of the tax is passed through to them.
5. There is no guarantee on how the money would be spent.
Despite the proponents claims, IP28 does nothing to guarantee the new tax revenues would go to schools, healthcare or senior services. The new taxes from this measure would be paid into the state General Fund, giving the politicians and bureaucrats a blank check to spend billions of dollars as they please, with no accountability to the public.
The simple fact is that IP28 would be costly and damaging to Oregon consumers and businesses. It would mean higher costs for Oregon products and services, as well as damaging economic impacts that could threaten the recent economic improvements we have worked so hard to achieve.
The Portland Tribunes May 26 editorial examining IP28 concluded: Dressing a regressive tax in progressive clothing wont make it any easier for Oregon families to foot a bill that undoubtedly would come their way. As Oregonians, we need to come together to defeat this harmful proposal that would only damage our state at a time when we should be working together to build strong schools and take care of those who need a hand up.
If youd like more information, please visit the website, DefeatTheTaxOnOregonSales.com. Add your name to the growing coalition list, sign up for email communication and keep in touch with coalition news and updates. Also, like the coalition on Facebook and follow them on Twitter to spread the word on social media about why IP28 is the wrong choice for Oregon.