Through a quirk – a perversion, some might say – of interpretation of the law, corporations are in many ways given the standing of human beings before the law. The reverse doesn’t always work out; people, for example, tend to pay income taxes much higher on average than many corporations do.
That was once less true than it is now. In Oregon, state House Revenue Chair Phil Barnhart notes that “Corporations now pay less than 6% of income taxes paid in Oregon. It used to be closer to 18%. But now over 2/3rds of Oregon corporations pay the $10 minimum.”
Some of that is worth remembering, since the argument that these are tough time for businesses – which they are – will be flashed prominently in argument against the new proposed raising of corporation taxes in the state. But the background needs some bearing in mind: The point of comparison is almost absurdly low.
The tax battle – now that much of the discussion about budget cuts is winding up – already is solidly partisan.
The Republican argument sums up this way: “Democrats in the Oregon House of Representatives announced plans last Thursday to pay for spending increases by raising taxes on Oregon small and family owned businesses. The plan to create a new tax bracket of 11% on filings greater than $125,000 targets Oregon LLCs, sole proprietorships, partnerships and s-corps, the typical organizational structure of Oregon small businesses.”
The Democrats describe their proposal differently: “new revenue would come from increasing taxes on profitable corporations and increasing the top tax rate for households making over $250,000 per year. . . . The plan has several components, including increasing the state’s corporate minimum to $100, up from its current level of $10. A second change to the corporate minimum would apply only to C-Corps which earn gross receipts over $500,000. Those corporations would pay an additional marginal rate of 0.15% up to a cap of $60,000. For those companies paying more than the corporate minimum, the bill retains the 6.6% tax on the first $250,000 of net income. But it raises the rate to 8.2% on net income over $250,000.”
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