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Conservatives Get It Wrong Yet Again About Oregon's Business Climate

August 11, 2011
COST - Ernst & YoungIt seems that one of the characteristics of conservatism is a  belief in things that are not true and disbelief of things that are true. One of the clearest examples of this phenomena is the conservative meme that Oregon is bad for business and that high taxes on Oregon businesses is stifling economic growth and driving business from the state.

As we pointed out earlier, this just isn't true. In fact Oregon has one of most business-friendly tax structures in the nation as documented yet again by a new report prepared by Ernst & Young LLP in conjunction with the Council On State Taxation (COST) titled "Total state and local business taxes, State-by-state estimates for fiscal year 2010 July 2011." This report ranks states by total business tax as a percentage of private sector gross state product (GSP). It turns out that Oregon has the fifth lowest total business tax in the nation.

The Oregon Center for Public Policy summarized the results:

A corporate-funded study says that Oregon has the fifth lowest “total effective business tax rate” in the country, a ranking that takes into account the tax increases put in place by Measures 66 and 67.

The study conducted by the accounting firm Ernst & Young on behalf of the Council On State Taxation (COST) (PDF) said that the total state and local taxes paid by Oregon businesses amounted to 3.8 percent of Oregon’s private sector economy in fiscal year 2010.

Businesses in only four other states — Connecticut, Delaware, Maryland and North Carolina — contributed a lower share in state and local taxes relative to the size of the state’s private sector economy, according to the COST study.

...

“Even the lobbying arm of big corporations recognizes that Oregon has low business taxes, a fact unchanged by Measures 66 and 67,” said Chuck Sheketoff, executive director of the Oregon Center for Public Policy. “The COST study once again documents that there’s room for Oregon corporations to contribute more to support the public structures from which they also benefit.” COST releases its study annually.

OCPP noted that each report has ranked Oregon as having low business taxes.

Here are the state rankings adapted from Table 5 of the Ernst & Young report. As you can see, the Oregon business tax burden is among the lowest in the nation -- far lower than the 5.0 percent national average.

State vs. local business taxes and business taxes as a share of private sector GSP, by
state, FY2010 (US$billion)
State Property
tax
Sales tax Excise and
gross
receipts
Corp.
income
UI tax Individual
income tax
on business
income
 
Total
Business
Tax
Connecticut 4.5 12.9 2.4 9.9 6.9 22.9 3.30%
Delaware 1.7 2.9 0.4 0.9 2 3.7 3.70%
Maryland 5.8 15.7 3 12.2 8.8 27.9 3.70%
North Carolina 8.1 22.3 4.9 11.7 13 34 3.70%
Oregon 2.6 8.1 3 6 5.6 14.1 3.80%
Utah 1.7 5.2 2.1 3.6 3.7 8.8 3.90%
Virginia 4.8 16.8 8.7 16.1 13.5 32.9 4.00%
Indiana 4.4 14.3 5.6 8.9 10 23.2 4.10%
Georgia 5.3 15.3 9.1 16.8 14.4 32.1 4.20%
Missouri 3.6 10.3 5.3 9.8 8.9 20.1 4.20%
Arkansas 2.9 7.6 0.8 1.7 3.7 9.3 4.30%
Idaho 1.1 3.1 0.9 1.5 2 4.6 4.30%
Massachusetts 7.9 21.6 6.5 14.1 14.3 35.7 4.30%
South Dakota 0.7 1.3 0.8 1.3 1.5 2.6 4.30%
Colorado 3.3 9 6.4 10.9 9.7 19.9 4.40%
Minnesota 6.7 18 3.7 7.4 10.3 25.4 4.40%
New Hampshire 1.2 2.2 1.1 3.2 2.4 5.4 4.40%
Tennessee 5.6 11.2 4.2 8.3 9.8 19.5 4.50%
Alabama 3.7 8.4 2.9 5.2 6.6 13.6 4.60%
Iowa 2.4 7.2 3.3 5.3 5.7 12.4 4.60%
Michigan 8.5 24.1 6.9 14.8 15.4 38.8 4.60%
Ohio 10.5 24.7 8.8 22.2 19.3 47 4.60%
Wisconsin 5.2 15.1 4.8 10.8 10 25.8 4.60%
Pennsylvania 13.5 32.3 10.6 23.9 24.1 56.2 4.80%
South Carolina 2.3 7.1 4.1 5.9 6.4 13 4.80%
Kentucky 4.2 9.9 2.4 4.3 6.6 14.2 4.90%
Nebraska 1.6 3.9 2.1 3.7 3.7 7.6 4.90%
New Jersey 11 27.9 9.9 27 20.9 54.9 4.90%
Arizona 4.6 10.5 6.2 10.2 10.8 20.6 5.00%
Illinois 13.8 31.4 15.3 29.5 29.1 60.9 5.00%
Oklahoma 3.4 7.2 2.6 4.2 5.9 11.5 5.00%
District of Colombia 3.3 5.5 0 0 3.3 5.5 5.00%
Texas 23.8 40.8 29.9 46.9 53.7 87.7 5.10%
California 46.5 109.7 38.9 77 85.4 186.7 5.20%
Nevada 3 6.1 2.8 5 5.8 11.1 5.20%
Louisiana 4.6 8.9 5.4 7.4 9.9 16.4 5.30%
Washington 9.3 17.1 5.9 11.8 15.3 28.9 5.40%
Hawaii 1.5 4.9 1.2 1.8 2.8 6.7 5.50%
Kansas 2.5 6.7 3.3 5.5 5.8 12.2 5.50%
Rhode Island 1.1 2.8 1.2 2.5 2.3 5.2 5.50%
Montana 1 2.2 0.7 1.2 1.7 3.4 5.90%
Mississippi 2.5 6.4 2.2 2.8 4.7 9.2 6.00%
New Mexico 2.4 4.5 1.3 2.3 3.7 6.8 6.00%
New York 25.1 66.1 35.9 75.1 60.9 141.2 6.20%
Florida 15 32.4 25.6 42.9 40.6 75.4 6.30%
West Virginia 2.1 4.8 1.3 1.8 3.5 6.6 6.70%
Maine 1.3 3.6 1.7 2.5 3 6.1 6.80%
Vermont 1.2 2.6 0.3 0.5 1.5 3 7.10%
Wyoming 1.6 2.2 1 1.4 2.6 3.6 8.10%
North Dakota 1.9 2.7 0.6 1 2.5 3.7 8.60%
Alaska 4.3 4.6 0.8 1.5 5.1 6.1 13.30%
United Satates 310.5 742.3 308.6 602.1 619.0 1,344.4 5.0%

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