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Group will ask voters to overturn Ore. business tax hikes

Mitch Lies, Capital Press 6/12/2009

SALEM - Radio personality and Oregon State Director of Americans For Prosperity Jeff Kropf said Friday, June 12, his organization is challenging tax increases adopted this week by the Legislature.

Kropf said Americans for Prosperity and other organizations opposed to the tax increases already are preparing petitions to circulate to voters.

Kropf said the group anticipates no difficulties gathering the 55,000 signatures necessary to place a measure challenging the increases on the November ballot.

Americans for Prosperity is a national organization advocating limited government and free markets on the local, state and national level.

The Oregon Senate one day earlier, on June 11, approved tax increases on corporations and the state's wealthiest households, despite failing to generate a single "yes" vote from Republicans.

Kropf formerly served as a Republican representative from Sublimity.

The increases are contained in two bills: House Bill 3405 raises corporate taxes and House Bill 2649 raises income taxes for households earning more than $250,000.

The revenue-raising bills needed "yes" votes from all 18 Democrats in the 30-member Senate to obtain the supermajority needed to pass.

The two bills are expected to generate $733 million to help fill a $4 billion state budget gap.

HB3405 raises the corporate minimum tax from its current $10 to a minimum of $150 for corporations with less than $500,000 in Oregon sales. The tax is determined on a sliding scale based on gross sales receipts. It caps out at $100,000 for businesses with $100 million in sales.

The Oregon Farm Bureau, in a news letter to its members, wrote: "The bottom line is that any of our Oregon Farm Bureau members that are organized as a C-Corp should immediately meet with an accountant to evaluate the pros and cons of reorganizing under a different structure."

HB3405 also raises some filing fees and increases taxes for companies that generate more than $250,000 in taxable income.

Senate Republicans - like House Republicans did previously - roundly rejected the tax increases.

"These taxes will undermine the small businesses that create jobs and help communities around Oregon thrive," said Sen. Chris Telfer, R-Bend.

"We're asking people who are potentially operating at a loss to pay an increase in taxes," said Sen. Jeff Kruse, R-Roseburg.

"We've already lost 40,000 jobs in the timber industry," said Sen. Fred Girod, R-Stayton. "This is ridiculous."

Democrats hailed the package, saying it brings balance to the state's tax structure and is necessary to maintain vital state services.

"It's time to bring more fairness and equity to Oregon's tax code," said Sen. Diane Rosenbaum, D-Portland.

"This state will go into chaos without these bills," said Sen. Alan Bates, D-Ashland.

Gov. Ted Kulongoski applauded the Legislature's actions in a press release issued shortly after the Senate's actions.

"This vote was not easy," Kulongoski said, "but it was necessary to protect our middle class and prevent devastating cuts to programs like education, health care and public safety."
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