Oregon East

Among my circle of friends, there's a pretty strong pipeline of migration between Oregon and North Carolina, and for good reason. Both states enjoy breathtaking natural beauty, relatively clean environments, and bright streaks of independent thinking among the electorate. The main differences I can see are (1) the temperature of the ocean and (2) the fact that Oregon doesn't have the dark shadow of Jesse Helms hanging over its history. North Carolina could do a lot worse than follow Oregon's lead in terms of fiscal policy and other innovations.

Oregon voters bucked decades of anti-tax and anti-Salem sentiment Tuesday, raising taxes on corporations and the wealthy to prevent further erosion of public schools and other state services.

The tax measures passed easily, with late returns showing a 54 percent to 46 percent ratio. Measure 66 raises taxes on households with taxable income above $250,000, and Measure 67 sets higher minimum taxes on corporations and increases the tax rate on upper-level profits.

Raising taxes on those who can most afford to pay. Sounds good to me.

Comments

Corporate Taxes

Corporations do not pay taxes. They may write the checks to the Dept of Revenue, but it is the corporation's individual owners, employees, and customers who pay in the end. "Raising corporate taxes" is merely a way to trick people into feeling good about and not noticing a tax increase on the individual.

How it used to work in my

How it used to work in my companies (all LLCs). I get a check from the company CFO for the amount of tax I have to pay, an amount driven by the profits of the corporation. In addition, I paid taxes on the income I earned as salary. It's easy enough to separate the proportion of taxes (and the rate) that is attributable to corporate profit performance from the taxes (and the rate) attributable to salary income. By conflating the two, you're masking the reality of what actually happens and how the differential tax rates apply.

Corporations don't what?

Corporations don't pay taxes?

Just like corporations don't run issue ads?

Or lobby?

Or pursue their interests as entities over the needs of the individual? (Am I'm really responding to a Libertarian here)

Or now get to be directly involved in federal elections?

 

Corporations do not pay taxes?

I've heard this argument that corporations don't pay taxes many times before. How the tax is just passed through to consumers. I understand what you are saying. I just don't think your argument is complete or fully accurate.

When we are talking about corporate taxes we are not just talking about Exxon Mobil. We are talking about the guy with a couple of tire stores or a restaurant too. I understand that. And the owners of such businesses are not fabulously wealthy people to be soaked to give the rest of us a break. But they certainly don't need to be subsidized by me.

Corporate taxes are only passed along to me IF I choose as a consumer to buy their products and services. For instance, I am driving a twelve year old vehicle that (the car gods willing) I plan to drive for several more years. It has been quite a while since the taxes paid by an automobile manufacturer have been "passed on" to me. You would have me pay those taxes anyway and thereby subsidize both the manufacturer and the folks buying those shiny new cars that I haven't treated myself to in years. Hardly sounds fair to me.

Of course we will never have complete agreement on what is fair. What is regarded as fair is all tangled up in whose ox gets gored. But a few things seem pretty clear to me. For decades our tax code has favored income derived from capital and more heavily taxed income derived from labor. We might want to revisit that and change it.

It occurs to me a tax code should be two things. Fair and Simple. As I said, we will never achieve universal agreement on what is fair. But I bet we would have near unanimous agreement that our current system is not simple. And its ludicrous complexity did not come to be by chance. It is designed to be manipulated and exploited for the benefit of those with a great deal of wealth at the expense of regular folks who work for a living.

I don't advocate a "soak the rich" approach. There aren't enough of them anyway. Regular folks always have and always will pay the bills. But I just don't buy this "corporations don't pay taxes" stuff. You might as well follow the supply side argument to its absurd extreme and eliminate ALL taxes and believe that will generate more revenue.

Ding ding ding

For decades our tax code has favored income derived from capital and more heavily taxed income derived from labor. We might want to revisit that and change it.

A great comment all around, especially the comments about simplicity. And while I agree somewhat with your final comment about "soaking the rich," maybe you'd go along with "sprinkling the rich?"

PS I don't consider myself rich by any stretch, but my annual household income is right at the threshold for paying higher taxes in the Oregon model. That would be just fine with me.

Okay, DanR

If you are not already or have not before, how about throwing your hat in some political ring? We DEFINATELY need some smart guys with some common sense like yourself coming out of our party these days.

That's very nice of you to say

but I am getting a little long in the tooth to embark on a political career. Besides, I am very new to North Carolina and have a substantial area of ignorance about this state and its politics. I would have a lot of listening and learning to do before I could even begin to think about it.

I'm sure I'll jump into a little precinct work this year. Many of the enthusiastic faces from 2008 may not show up this year. Worker bees will be needed.

I think I will be content to help turn out the greatest possible Democratic vote and to encourage others to get involved.

Nope

I have my own business and am along the lines of your "guy with a couple of tire stores."

It IS that simple. All costs, including taxes are borne by my customers and perhaps indirectly my employees. Unlike the federal government, I cannot spend more money than I have. So, all funds necessary to cover payroll, supplies, payroll taxes, healthcare, etc. come from my customers. If I have zero profit, there are no income taxes. If I have a ton of profit and have to pay taxes, the money is still coming from my customers.

I already pay for health insurance for my employees. When it goes up, as it does every year, I have to make sure I have the money to pay the monthly premiums. If the market will bear it, raising prices can help. It also means I am less likely to have the funds to just pay my employees, including myself, more in actual wages. So, if I am breaking even and then my costs go up, my customers pay more and my employees might not get the raise they deserve. And before anyone brings it up, times are tough and I have cut my already low base pay to ensure I do not have to cut employee compensation or lay more people off.

I hear you on the inconsistencies of investment vs labor taxation, but in the end, no matter the tax rate, a company's customers are the ones who give it money and therefore are the ones who pay the taxes in the end.

That's assuming margins hold

The newspaper industry is a great example of a business model that grew accustomed to lavish margins and failed to invest their profits in innovation. Now they're cutting, cutting, cutting to try to preserve margins (and failing), while shooting themselves in the foot in terms of content quality. Customers aren't paying anything, they're leaving in droves.

It's possible to have progressive taxation on corporate profits just as we have on personal income. Big companies can use exponentially more services in terms of public infrastructure than small companies, and often have huge hidden costs (environmental, in particular) that never get covered. In comparison to a small business owner like you ... and like I used to be ... a company whose CEO makes $17 million a year is almost certainly not paying its fair share in taxes.

I'm not saying..

"don't tax companies." I'm just saying that any efforts to "stick it to corporations" as a way to avoid raising personal taxes is somewhat futile. No matter the tax rate on businesses, it is always individuals in the end who foot the bill- most just don't realize it.