On November 8, the state of Oregon declined to pass through an initiative which would have severely impacted corporate tax rates. The initiative – known as Measure 97 – was targeted toward Oregon-based C corporations which brought in upwards of $25 million in gross sales in a single year. Corporations bringing in $25 million or less would have been unaffected by the measure.
Measure 97 would have compelled C corporations (with sufficient gross sales) to pay an additional tax of 2.5 percent on top of their original rate. However, businesses classified as “benefit companies” – meaning a business which has aims to either help the community or the environment – would have been exempt from the extra tax even if they brought in sufficient revenue.
Oregon currently has no sales tax and also has one of the lowest state corporate tax rates in the union. Proponents argued that Measure 97 was a logical step to bring Oregon’s tax policy closer in line with other states. Supporters of the initiative also argued that the increase was needed to raise funds for a variety of public projects, including education and healthcare. If the measure had succeeded at the ballot box, Oregon would have likely received an extra $3 billion annually in tax revenue.
Measure 97 was shot down by a clear majority of voters; the initiative received 1,141,677 votes for “no” and 792,094 votes for “yes” (or 59.04 percent vs. 40.96 percent). Opponents cited the fact that the new state corporate tax rate imposed by the measure would have been among the highest in the country.
Interestingly, the battle over Measure 97 was the most expensive ordeal in Oregon’s history. Supporters and opponents of the bill raised a combined total of approximately $42 million in preparation for the ballot.
Measure 97 certainly would have given the state pocketbook a large boost. However, too many people saw its flaws and so Oregonians will have to think of another way to address shortages for public needs.
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