Proposed ballot measure to raise corporate taxes, give every Oregonian $750/year | Hacker News Reader

Proposed ballot measure to raise corporate taxes, give every Oregonian $750/year

oregonlive.com

45 pointsdocdeek48 comments

> The proposal, Initiative Petition 17, would establish a 3% tax on corporations’ sales in Oregon above $25 million and distribute that money equally among Oregonians of all ages.

Just a flat tax into a flat stipend. I wish all taxes were this straightforward.

How is this fiscally sound? What if major corporations say no and leave the state?

You'd just abandon whole state of your paying consumers? Kick yourself of the market voluntarily?

Of course if you pay in tax more than you earn than sure but if not?

You only need a subsidiary in Oregon. So all major components get moved outside the state, including higher wage jobs, and leave bare minimum distribution in Oregon. Which undoubtedly contracts with another out of state subsidiary for "marketing" to ensure profits are below the 25m threshold.

The tax should be on sales I think. You can't move out the customers.

A market full of people with an extra $750 to spend!

> What if major corporations say no and leave the state?

Which major corporations would you predict are likely to forbid product “sales” in Oregon if this passes?

> Initiative Petition 17 would establish a 3% tax on corporations’ sales in Oregon above $25 million

What stops them from just charging 3% more? Kinda sounds like an awkward sales tax?

It is a sales tax, they're just pretending that it will be paid by the seller--as though corps will just take a 3% hit on profit margin! The only differences I can see are A) the tax will be obfuscated (i.e. baked into the sales price, or shifted from low-margin to high-margin items), rather than neatly listed as a line item on the receipt, and B) businesses with revenue under 25M are exempt.

Sales taxes are typically a geographic boundary and a product inclusion/exclusion list. The addition of “seller’s annual revenue” may not fit within existing legal definitions (I haven’t checked), and I expect that naming it a “corporate tax” serves various marketing purposes (both for the headline’s author, and for the proposal’s authors).

I'm generally in favor of taxing things you want less of, and not taxing things you want more of. In this case, I'd prefer carbon taxes and refunding the collected amount to all tax payers.

This is exactly how populism rises: who will vote no to the simple proposal to take money from "others" and give it to them?

Others in this case generally being corporations and rich folk

> corporations and rich folk

In 2022, about 58% of American households owned stock, either directly or indirectly through mutual funds and other investment accounts.

https://www.axios.com/2023/10/18/percentage-americans-own-st...

I would expected an individual in the top 10% to have more than 30x the stock an individual below 10% but apparently not [1].

Although top 10% holding 89% of stocks does pretty much mean the rest of america is really just dabbling in the stock market.

[1]: https://www.fool.com/research/how-many-americans-own-stock/#...

It's a 3% sale tax on corporations. It's more complicated, but corporations will just increase prices 3% and the consumers will pay it. If you are earning more than 25.000 anualy, you will get a negative total.

I think you mean spending more than 25000 (on things subject to sales tax), not earning 25000.

Unles you are hordingypur money in the bank or burning it in the backyard, you are going to buy something that has the tax.

I think you must discount the taxes aplied directly to your salary.

You can also go abroad in the holidays, or perhaps buy online from another state (but they may close the "loophole").

This sounds like the "if you raise minimum wage by $10 then a burger just becomes $10 more expensive" which sounds true but never is [1].

> [2] Despite the different methodologies, data periods and data sources, most studies found that a 10% US minimum wage increase raises food prices by no more than 4% and overall prices by no more than 0.4%.

[1]: https://www.google.com/search?q=effect+of+raising+minimum+wa...

[2]: https://docs.iza.org/dp1072.pdf

The claim would be that prices rise, offsetting the cost to the consumer who are also workers. It does not do much if that is how it shakes out. The stated hope of those arguing for the raise is that the people at the top of the company make a lot of money and that money would be diverted to the workers. While I am sure that happens sometimes, I am not aware of evidence that this is often the case.

The $10 a burger price increase would be a stupid prediction unless the worker just sells one burger an hour and nothing else. If an employee's share of the selling amounted to, say, 10 burgers an hour on average, then a $1 price increase on burgers would counter the wage raise.

I agree. Also, the cost of the burger includes the cost of labor that may be at minimun wage, byt also the cost of the meat and the bread. That includes the salary of the farm workes that may be at minimum wage, but also the salary of the genetic engenneer making transgenic wheat and the salary of the oil field extraction employes that usualy have big salaries.

So the final increase is harder to calculate.

The people receiving $750 are neither all workers nor consumers of the businesses being taxed.

Sure as an aggregate I bet at least one Oregonian is a consumer/worker of any business with >$25M of income but if you don't spend at least 25k ($750 * (1/0.03)) at businesses making over >$25M then you're coming out ahead if prices go up by 3% at _just_ those specific businesses.

I still don't understand why sales tax is so popular instead of taxing on cooperate profits. Sales taxes create all the problems, the tax is passed directly onto customers, and the administrative costs are higher.

Because it's easy to collect, whereas corporate profit taxes have lots of room for creativity.

It is definitely easier to audit profit taxes that has to follow a standard protocol than checking every transaction. Do we expect the auditor to call random customers whether they purchased bread on November 17 last year?

What exactly is easier about auditing profits, when they are the difference between a claimed number (income) and another claimed number (expenses), whereas sales tax is literally printed on receipts?

Thats why you hear about megacorps paying $0 in (profit) tax, but you never hear about anyone "dodging" sales tax.

If corporations can just increase prices with whatever percent they need to offset some tax, why don't they just increase prices with 5% or 500% already, and pocket the profit, despite there being no tax that requires the increase? Seems like an obvious thing to do, and the incentive is totally there (free profit).

Competition. They wouldn’t be able to do it individually, but they could collude so they all do it. Of course that would be illegal.

All taxes are taking money from others. In this case it's taking it from corporations and giving them to every citizen. In other cases you take it from citizens and give it to other citizens, the military, corporate subsidies, etc.

Also, populism means something else.

>Also, populism means something else.

Excellent point! Trump is a populist and his tax bill (his only achievement) suggests he does not endorse this at all.

Exactly. Populism usually means "the people vs the elite", and in this case is just taxes.

Coincidentally, that achievement raised my taxes several thousand a year. Because I live in Oregon.

Oh well. It expires soon, right? I mean, the middle class part at least?

I’m confused at how that’s populist.

How is it more populist that low tax states subsidize high tax states?

Its taxation without representation with extra steps. I don't get a vote on your spending but I need to give more to the feds because of something you wanted for yourself.

What if they paid high taxes in Europe and got all these services, why shouldn't you give extra to NATO and spend billions defending the European theater (resulting in pretty high taxes) and then Europeans can make fun of you for not having any services they have. (I started this as a hypothetical but realized that's just how it is.)

You have to know it is more complicated than that. Oregon is very much not one of the states that gets the most welfare from the feds vs what we pay. Just like almost every other measure I can find, Oregon is pretty much smack in the middle. The SALT change just screwed over individual taxpayers.

Also, the populist comment was aimed at the fact that the tax 'cuts' were built with an expiration date for the poors but permanent for the wealthy. That's pretty much the opposite of what a true populist would do.

>Coincidentally, that achievement raised my taxes several thousand a year. Because I live in Oregon.

Why are you upset at paying your fair share of taxes? The SALT deduction is regressive by nature.

How are you defining 'fair share' in any way that makes sense? It's not even remotely as simple as you're making it out to be. And it doesn't even matter in the end, the federal budget is only loosely correlated with how much people pay in taxes. But real people, normal people, got screwed by the change, even if you think it was totally okay to do it.

I'll take the free money but I fully expect to have to move to another state once this proves unsustainable. Washington is close and has no state income tax.

Washington still has a higher overall tax burden than Oregon, though, so don’t fixate on just income tax.

But it’s also the most regressive tax state (Oregon closer to the least regressive) so if you’re highly compensated it could still be a win for you.

They first could of hits on Google claim Oregon has a higher tax burden. Not by much, but still higher.

I'd question the source on that. Unless something changed in the last couple months, Tax Foundation puts the burden higher in Washington.

The only way to help people struggling with income is to lower their income taxes.

That forces them to still be productive members of society instead of supporting populist handouts that are not sustainable once the ball gets rolling and corporations move out.

> The only way to help...

Sounds like you're unfamiliar with the "working poor" in modern America. If your income is low, and rent/food/transportation/health care are expensive, then "pay zero incomes taxes" will not magically balance your books.

(Not saying that this measure would balance them either. Nor that it's optimal tax policy/public policy. Nor that doing anything that's anywhere near "optimal" is even possible, in modern-day America):

If a person is a stay-at-home homemaker, cleaning the house, shopping for food, cooking, attending to the children, and more, would you consider them a productive member of society?

Edit added below:

And what about someone who volunteers 80 hours per week maintaining an open-source software used by hundreds if not thousands of companies?

Does one need to be directly paid to be a productive member of society?

Every rule has exceptions.

Removing incentive, and self sufficiency as a goal of our current system isn't the answer. The answer instead is to tweak it so other types of work have value, and result in support.

We already have that, in the form of charitable and non-profit foundations, corps. We even encourage that, in the form of tax deductions for those donatong to the same.

We have a patch already, it just needs to be deployed more if required.

So we already have a mechanism to aid with non-profit open sauce work,

Beyond that, there are many different types of hobbies people employ.

But to the homemaker, caring for children, he already has a boon, at least where I live. Thousands in tax deductions and credits (eg, just cash) along with monthly cash, the more children, the more paid.

The US might use more of that, to patch that hole.

If a person is a full-time homemaker, they don't have income so a tax deduction doesn't do much. A credit might, depending on how much it is. I'm curious, do you know how much they receive?

Regarding non-profits, most people have jobs with the non-profit, meaning they give services in direct exchange for money. If people are volunteering their services, they must receive money from somewhere else to live, and that often seems to come from a job, a family member, investment, or inheritance. I don't know of many ways we enable people to do communal work, besides maybe those listed above and maybe the tax credits.

Actually, if the tax credit equals $750 and is given to everyone, isn't it the same as the proposal above?

I don't know of many ways we enable people to do communal work, besides maybe those listed above and maybe the tax credits.

I just told you one. Charities, non-profits or foundations. These are the mechanisms that may be used to pay volunteers. There are also tax incentives for the rich to fund them, charitable donations are deductible.

I also said "We have a patch already, it just needs to be deployed more if required."

It does not matter that these people are "volunteers", for your goal is to see them funded. Saying it's not reasonable to pay them a wage for their volunteer work, doesn't jive here.

You say you just want everyone to receive cash. I don't. At all. I want people doing things of worth to society, even a portion of it to receive cash for their efforts.

You should note my culture, in that, I believe the infirm, the sick, those mentally incapable of working, and so on should receive a dignified living.

I also belive that even those just generally lazy, or to selfish to work should receive shelter, and food. They should not die from the elements, nor starve.

But I certainly believe the lazy and selfish should have no extra capital given to them by the state. Only enough to survive, no more.

I also don't think handing out cash to rich, poor, lazy, industrious alike makes sense.

Save the cash for those we really need to care for, the infirm, the sick, and so on.

There is a significant portion of people that are quite simply lazy. I believe it to be double digits.

I am not a fan of planned social governance, but if it were to happen, I'd start by prohibiting the lazy from procreating.

We don't need more of those genes.

Maybe I've been missing it, but I'm not sure how non-profits pay people to volunteer. I thought that paying them directly for their services would turn them into a contractor or employee, and thus make their services no longer volunteer services. But I would love to be incorrect about that, as then I think it could help me with a lot of my work.

Edit:

And about wanting them to receive cash, I'd actually prefer if everyone received shelter and food and water and air and healthcare, but if we're not going to provide those things, then if we provide them cash maybe they can get them.

What you call 'incentive' is direct threat of homelessness and starvation.

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