Summary of Stakeholder Feedback

Summary of Stakeholder Feedback Stakeholders consistently identified Oregon’s tax structure as a barrier to business growth and competitiveness. They noted that the combined impact of state and local taxes discourages business investment and growth, particularly for small and mid-sized firms, a critical segment of the economy given that 97% of businesses employ fewer than 50 people and collectively support 52% of employment statewide. While the Corporate Activity Tax provides stable revenue, its broad application across supply chains can create cumulative tax burdens, especially for traded-sector 1 The effective tax rate is the actual share of income, property value, or business activity that is paid in taxes after accounting for deductions, exemptions, credits, and other tax rules. 2 See Appendix F for scenarios analyzing additional filing and earning characteristics to estimate effective tax rates including estimates of sales tax in neighboring states.

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2 . TA X E S industries. At the same time, stakeholders emphasized the need to maintain stable, predictable funding to support top public priorities such as education, healthcare, and other core services. Stakeholders also highlighted the importance of ensuring government spending is efficient, transparent, and aligned with outcomes. Any reform must balance stable public funding with policies that strengthen Oregon’s long-term economic competitiveness. Portland-Specific Issues Layered local income taxes combine to make marginal tax rates for households uncompetitive with adjacent counties and states. Over the past three years, Multnomah County lost $3.5 billion in personal income through out-migration to other counties and states, including nearly $730 million to Clark County in Washington (Vancouver). The net effect undermines the region’s job creation priorities, weakens overall economic competitiveness, and results in lost revenue for needed public services. Portland Metro stakeholders noted challenges with overlapping local income taxes, structured sunset reviews for new tax measures, and higher signature thresholds for tax-raising ballot initiatives. The Portland Central City Task Force’s Tax Advisory Group’s report identified needed changes that remain unimplemented. High-earning households and business leaders have options, and Portland has become unattractive, making its public revenue base more fragile and undermining the state’s prosperity.

Parent: Chapter 2: Taxes · PDF: pp. 17-18