High income and property taxes, along with a healthy dose of government regulation, are making conditions tough for business owners.
Oregon’s Tax Burden Ranks as One of the Country’s Worst
Oregon residents might be happy campers when it comes to not having a sales tax, but a recent Tax Foundation study shows that it has one of the biggest state and local tax burdens, coming in as the tenth worst in the country.
Using data from the 2012 fiscal year, the study demonstrated that, on average, most states’ tax burdens as a share of state income have actually slightly decreased in past years.
This is true for Oregon, too, which has a 10.3 percent state and local tax burden as a percentage of its income—a decrease from the 2010 level of 10.7. However, other states’ climates have improved and jumped ahead of Oregon, which now ranks worse nationally than it did a few years ago.
High income taxes and property taxes are partially to blame. Also, because there is no sales tax, the state isn’t capturing any out-of-state tax money from visitors.
“Certainly because we don’t have a sales tax our other taxes are higher,” NFIB/Oregon State Director Anthony Smith says. “The large majority of the revenue that comes into the state comes from Oregonians. So we’re funding our government strictly from our residents in ways that other states aren’t.”
The resulting taxes on income and property can be a tough blow to handle, particularly for small business owners.
“I think the legislature would like to think of itself as small business friendly, but there are other things on top of the tax structure that have given us a hard time, like higher minimum wage and paid sick leave,” Smith says.
“In the legislature—while at times they can show concern for small business—the overwhelming tone is on the side of labor. If we were at least having the conversation about lowering tax rates, at least having the conversation about reducing regulations—that would help, but that’s not the conversation we’re having.”