Oregon Corporate Tax Disclosure Headed to Ballot?
May 31, 2006
According to sources at Associated Industries of Oregon (AOI), a measure to force corporations to publicly disclose certain tax information will go before voters soon. AOI says that proponents of the measure have collected enough signatures to get the measure on the ballot.
According to this article written by AOI’s Harvey Matthews, the measure would require Oregon corporations to disclose the following information:
• The amount of profits taxable by the State of Oregon • Total US taxable profits as reported to the IRS • The extent of the corporations’ sales, property, and payroll that can be tied to Oregon. • Final total Oregon tax liability for the year • The most recent assessed value of real and personal property in Oregon and the gross assessed tax on that property
The measure is ostensibly designed to raise public awareness of the taxes that corporations pay in the hope that such awareness will build public support for corporate tax increases, if disclosure reveals excessive corporate tax dodging.
This is bad tax policy for several reasons. First, and most importantly, the measure betrays a complete lack of faith in Oregon’s Department of Revenue, which is supposed to track down corporate tax dodgers and force them to pay their fair share. Indeed, the mission statement of Oregon’s Department of Revenue is to “make tax systems work to fund the public services that preserve and enhance the quality of life for all citizens.”
Second, as Matthews notes in his analysis, the measure would place Oregon at a competitive disadvantage vis-à-vis those states that maintain corporate tax privacy. All else being equal, a business might choose to invest in a state where they would not have to publicly disclose their tax information.
Corporate tax disclosure is also an issue in Montana, where State Senator Jim Elliot sued the state to force disclosure of certain corporate tax records, with the same goal as the proponents of the measure in Oregon. We analyzed his lawsuit in this article, finding that it suffered from many of the same policy flaws as the Oregon measure.