Seven Tax Troubles of the 2021 Legislature
1. Capital Gains tax could break 50%!
President Biden wants to increase the top capital gains tax rate from 23.8% to 43.4% for higher income earners. If you add Oregon's rate of 9.9%, you now hit 53.3%.
2. PPP loan tax
At the last minute, lawmakers are resurrecting Senate Bill 137-2, which would tax larger PPP loans awarded to struggling businesses when the government ordered them shutdown. Oregon stands to collect $600 million by taxing these lifesaving loans used to rescue small businesses from extinction.
3. Property tax hike
One of the Legislature's most active tax threats is Senate Bill 852, which would strip the mortgage interest deduction for higher income earners and for anyone with a second home. It would easily cost many homeowners $1,000 to $4,000 in higher tax bills. Even worse, the tax is a marriage penalty, as it taxes married couples higher than unmarried couples living together making the exact same amount.
4. CAT shoots the wounded
Oregon manufacturing hit the worst monthly decline since 2009's Great Recession. Economists blame the pandemic and trade war disruptions but miss the point that the Corporate Activities Tax acts as a second punch to these crippled industries. The CAT is one reason why our manufacturing has declined twice as much as the national average.
5. Raising taxes behind closed doors
Lawmakers passed Senate Bill 846, which will cost every taxpayer higher income taxes next year. The bill was described as a budget transfer bill, but legislators failed to make public that it would impact the Kicker Income Tax refund calculation and therefore reduce people’s refund by millions. This is a classic example of raising taxes while keeping the public in the dark.
6. Tolling our interstates
House Bill 3065 is advancing in the Legislature. It would create the process of tolling Interstate 5 and 205 as a way to raise road funds despite the recently passed $5 billion (10-year) road tax fund passed in 2017.
7. Paying people not to work
Roughly 23 states have pulled out of the federal government's $300-per-week unemployment bonus program, which ended up paying people more to stay home than to work. The Oregon Legislature has decided to stay in the program, which has contributed to our huge 50,000 job vacancies that employers cannot fill because our workers are being subsidized to do nothing.