State law proved to be no
match for Senate Democrats' desire to illegally pass a $22.8 million-dollar tax
hike in the House last week. Senate Bill 28 was passed in the House and will
spike taxes at least $22.8 million in the two upcoming budget cycles.
Our Republican legislators universally voted against the tax increase and made the claim that SB
28 should have originated in the House because it is a revenue raising bill.
Additionally, the bill allows
taxes to be raised with a simple majority vote versus the three-fifths or 60/40
margin required by the Oregon constitution.
In 1996, Oregonians approved
Ballot Measure 95, now Article IV, Section 25, of Oregon’s Constitution, which
mandates that tax increases receive a three-fifths vote of all members in the
Legislature. Article IV, Section 18 of the Oregon Constitution requires tax
hike bills to start in the House of Representatives. Therefore, SB 28 is illegal
on two fronts, 1) it passed without the legally required three-fifths vote, and
2) it inappropriately originated in the Senate.
Senate Republican Leader Ted
Ferrioli stated, “Disregard for the Constitution prevails yet again, with the
House passing an illegal tax hike. This outrage will be countered with
litigation. Democrats want to ignite fury within the hearts of Oregonians by
trampling on the Constitution.”
Oregonians are being
exploited by House and Senate Democrats who are violating Oregon’s Constitution
to dramatically spike taxes.
This tax hike is a demonstration of their
willingness to approve “lawlessness.”
Small Oregon businesses will see
a dramatic hike as the legislature schemes for revenue. For some businesses, it will be a brand-new
tax. Senate Republicans decried the passage of SB 28 saying it thwarts the will
of voters. Republicans also point out that it should have first been introduced
in the House of Representatives.
Senate Bill 28 modifies how
Oregon corporate income taxes are apportioned for intangible property and
services. It changes the apportionment method from a cost-of-performance method
to a market-based method.
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The cost-of-performance
method attributes all corporate income tax revenues to the state where the
greatest proportion of the activity is performed. For example, if most of the
effort for manufacturing and creating your product is done out of state then
your product would be taxed based on the appropriate proportion of in-state
verses out-of-state work.
The market-based method
attributes corporate income tax revenue to the state where the customer is
located. In other words, even if all your work, offices and effort are in
another state, Oregon will tax your business based on total sales if any of
those sales occur in Oregon.
However, the Democrat raiding party is
not finished picking your pocket. House Bill 2060A is another direct
tax increase on small businesses. It too, passed out of the House by a simple
majority.
HB 2060A imposes a tax
increase, up to 40%, for small businesses with fewer than ten employees while
preserving lower rates for larger S-corps, LLCs and LLPs. It is a $196
million-dollar tax increase on Oregon’s smallest businesses.
The 2013 Grand Bargain
between Democrats and Republicans provided tax relief to small Oregon
businesses. House Bill 2060A would remove the protection provided to small
businesses by Republican legislators in 2013.
Also, the tax-grabbers
decided to go after the smallest-of-small businesses. They changed the language
to expand the size of companies that could quality. Formerly, the Grand Bargain
allowed an individual business owner to qualify for a lower tax rates. This
House Bill increases the size of the company receiving the benefit by ten-fold.
This means a small individually-owned
business, or the Mom and Pop operation, are eliminated from the possibility of a reduced tax liability.
These small businesses will be forced into paying more of their hard-earned
income into this Democrat sponsored revenue collection scheme.
Not only are more employees
required to qualify, but the Democrats jimmied the numbers by adding even more requirements for
qualifying businesses. These added conditions reduce the overall number of
businesses that will be able to qualify for the lower tax rates.
See… Money is easier to find
than gumballs in the sofa cushions
This financial tyranny runs contrary to our state and nation's most sacred principles. George Washington said, “I think the Government hath no more Right
to put their hands into my Pocket, without my consent, than I have to
put my hands into your’s, for money…”
Washington's thoughts flow directly from our Declaration of Independence, immediately following Life, Liberty and your happiness through just pursuits. It states, "to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed."
However, today the folks in Salem are following the rule that Ronald Reagan criticized so poignantly. He claimed that big government policy wonks believe in the motto – "if it moves, tax it. If it keeps moving, regulate it. And if it stops moving,
subsidize it.”
Remember, if we don’t stand
for rural Oregon values and common-sense - No one will.
Best Regards,
Dennis Linthicum Oregon State Senate 28
Capitol Phone: 503-986-1728 Capitol Address: 900 Court St. NE, S-305, Salem, Oregon 97301 Email: sen.DennisLinthicum@oregonlegislature.gov Website: http://www.oregonlegislature.gov/linthicum
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