Measure 97 is one of the most ill-conceived initiatives ever presented to Oregon voters.

Sponsored by public employee unions, Measure 97 levies a new 2.5 percent tax on sales (not profits) greater than $25 million of all C corporations doing business in Oregon. It would be the largest tax increase in Oregon history.

Measure 97 raises taxes by a shocking 500 percent over what C corporations paid in Oregon excise and income taxes in 2015, transferring an incredible $3 billion more per year from the private sector to public coffers.

New taxes of this magnitude will rip through the Oregon economy like a tsunami just at a time when Oregon is finally experiencing a robust recovery from the Great Recession.

Measure 97 supporters like to use the phrase “large and out-of-state corporations” to mislead us  into thinking Oregon-based corporations are exempt. The fact is the measure applies to all C corporations, Oregon-based and out-of-state.

The Register Guard has recently reported the impact on some Oregon corporations. Lithia Motors would pay $30 million to $40 million per year in new taxes, an amount close to all of their profits. Wildish Construction’s new tax of nearly $2 million per year on $100 million in sales was characterized as “unsustainable”.

One can find many more examples of Oregon-based corporations who would struggle under the burden of this tax. Yet supporters claim that businesses will “absorb” the tax increase. That just defies common sense.

Measure 97 supporters say corporations should “pay their fair share”. But the fact is Measure 97 is exceedingly unfair in imposing the same tax rate on all type of businesses.

Measure 97 makes no exceptions for high-sales, low-profit-margin businesses such as grocers, auto dealers, and construction companies. A new 2.5 percent tax would take virtually all of their profits. Few of us would say that is a “fair share”.

Washington state has taxed the sales of businesses for many years. Unlike Measure 97, Washington’s system established different tax rates for different types of businesses. Retailers and construction companies are taxed at a rate of less than one-half of one percent, manufacturers even less. Washington’s top rate is just 1.63 percent. And Washington does not levy income taxes.

One must question why the authors of Measure 97 chose not to emulate Washington’s law in any significant way. They claim to have done careful research, but compare Measure 97 to Washington’s detailed and nuanced tax. Measure 97 is all of one page long. To address an issue of such massive scope and complexity with a one-page initiative shows a troubling lack of effort to create something fair, and a disdain for its effect on the Oregon economy.

Taxation of Oregon corporations and funding of education are perfectly valid topics for public discussion and possible action. But why did the authors of Measure 97 choose a such a heavy-handed approach?

We should not be surprised that public employees and their unions have joined the long line of special interests who resort to the initiative when they cannot get what they want from the Legislature.

But Measure 97 is unusually flawed. It was written behind closed doors with no meaningful public input. It is so simplistic it creates large inequities in the tax burdens of different types of businesses. And despite their research, the authors let moderation and fairness take a back seat to their own interests. 

The result is an alarming measure that strikes a massive blow to the Oregon economy while clearly benefiting public employees.

Our no votes can reject Measure 97’s damaging taxes and risk to the Oregon economy. And our no votes will send a message that special interests cannot use the initiative to put their own agenda above what is best for Oregon.