Monday, April 15, 2019

Oregon business tax proposal unveiled | Local | gazettetimes.com - Corvallis Gazette Times

Oregon business tax proposal unveiled | Local | gazettetimes.com - Corvallis Gazette Times


Oregon business tax proposal unveiled | Local | gazettetimes.com - Corvallis Gazette Times

Posted: 11 Apr 2019 06:41 PM PDT

SALEM — Oregonians could pay less on their state income taxes but pay more for some goods and services, under a legislative proposal to raise money for the state's struggling public school system.

The long-awaited proposal will tax businesses just under one-half of 1% of their gross receipts over $1 million while cutting Oregonians' income tax rates by one-quarter of a percent for all but the top bracket. Sales of groceries, gasoline and diesel would not be taxed under the proposal.

The smallest businesses — those that make less than $1 million in taxable revenue per year — will not be subject to the tax, nor will any that already pay the medical provider tax. Businesses that are taxed will be able to allay the impact by deducting one-quarter of either their labor costs or the amount they paid to other businesses during the course of the year.

A small group of state senators and representatives from both parties, led by Sen. Mark Hass, D-Beaverton, and Rep. Nancy Nathanson, D-Eugene, has been meeting for weeks to hammer out a business tax proposal. In addition to taxing businesses on their sales, they have agreed to cut Oregon's personal income tax rates as a way to offset costs that companies will likely pass along to consumers.

Gov. Kate Brown called last year for lawmakers to find new revenue for K-12 education over the next biennium. Hass said he is shooting for at least $1 billion per year.

Money from the new tax will go into a new state fund called the Fund for Student Success, which will support K-12 and early childhood education statewide.

Revenue from the corporate activity tax will pay for the $2 billion Student Success Act that legislators unveiled last week. The tax plan, which is still subject to change, is a part of that act.

A version of the proposal was posted as an amendment on the Legislature's website briefly on Thursday afternoon before being taken down due to drafting errors, according to Hass' office, which confirmed the basic outlines of the plan.

Hass, Nathanson and other key legislators have been studying two closely related models for several months, trying to decide how to craft their corporate activity tax plan.

Oregon Business & Industry, a coalition of some of the state's largest employers, suggested that lawmakers look into a value-added tax to ensure businesses don't have to pay more for every step in their production process. At least some production costs would be deducted from the tax bill — an idea lawmakers have incorporated into their plan.

A rival group called Coalition for the Common Good, made up primarily of labor groups and Beaverton-based Nike Inc., put forward another option modeled off of Ohio's commercial activity tax. That proposal resembled Ballot Measure 97, a proposed gross-receipts tax that Oregon voters rejected in 2016.

The current plan is a blend of the two competing concepts.

"I want to do the best policy that is most fair to most businesses," Hass said earlier this spring. "I'm going to avoid a situation where this places a greater burden on one sector or one size of business."

Melissa Unger, executive director of SEIU 503, reacted positively to the plan.

"We are encouraged about the direction the Legislature is headed, funding critical services with a reasonable corporate tax," Unger said Thursday.

OBI isn't quite on board yet, said its executive director, Sandra McDonough, but it does see encouraging aspects of the plan now on the table.

"We were happy to see that they have introduced this concept of a hybrid that starts to address some of our concerns about pyramiding," McDonough said, referring to the accumulation of taxes on every stage in the production process. Gross-receipts tax critics argue that pyramiding is unfair because it disproportionately affects producers of complex goods.

She added, "It's not where we think it needs to be, but we've indicated we're willing to continue the conversation."

In Oregon, raising taxes or creating a new tax requires the approval of three-fifths of senators and three-fifths of representatives. That gives the Democratic majority a narrow path to passage, as the 18 Senate Democrats constitute exactly three-fifths of the chamber.

Lawmakers also have other major issues to sort through.

The education package itself is complex, and it has already faced pushback from Brown, who said Thursday she wants a share of the new tax revenue to bolster career and technical education and expand financial aid for college students.

As proposed by legislators, the Student Success Act would invest $2 billion over a biennium into K-12 education. Those dollars would pay for more add teachers and support staff, instructional days, elective and extracurricular activities while also investing in early childhood education and preschool programs, mental and behavioral health resources, and recovery planning for struggling school districts, among other areas.

Both the business tax and the lower personal income tax rates would take effect next year. Projections suggest the tax plan would bring in just shy of $1 billion for K-12 education in 2020.

However, opponents could force a statewide vote on the tax changes if they get through the Legislature. Controversial bills are often referred to the ballot, a process that a senator and a representative can initiate.

"We're ready for that," Hass said of a potential referral. "If that's the way it goes, that's the way it goes."

The last time a major tax increase was on the statewide ballot in Oregon was Measure 97 in 2016. Voters shot down the proposed $3 billion corporate sales tax, with 59% voting "no" to bury the measure.

Hass attempted to marshal support for a more modest tax package in 2017, but his plan died without a vote.

Last fall, Brown proposed $12.3 billion in spending for the Department of Education, 11% more than the current budget.

Oregon has the second-lowest high school graduation rate in the country, according to U.S. Department of Education data. Only New Mexico graduates fewer of its high school students within four years.

Funding levels for Oregon schools has declined since voters approved Measure 5 in 1990, slashing the amount of money schools receive from local property taxes. Instructional time has fallen in many school districts, as have staffing levels.

Ballooning public pension costs have also hit school districts hard. McDonough said OBI believes "cost control" needs to be addressed if taxes are being raised: "Specifically PERS reform, so that we can make sure that any new dollars raised actually make it to the education package that they want to support."

The Legislature passed major PERS reforms in 2013, but the Oregon Supreme Court invalidated most of them in 2015.

A citizens' group including former Gov. Ted Kulongoski and former state Sen. Chris Telfer is working toward petitioning PERS pension cuts onto the ballot in 2020.

Sen. Jeff Timberlake: Maine is no longer 'Open for Business' - Lewiston Sun Journal

Posted: 13 Apr 2019 09:01 PM PDT

As someone who has served in Augusta for a number of years now, I have seen a lot of bad ideas entertained by the Legislature. But this current session has truly been one for the record books. The sheer volume of bills this session with the potential to cripple Maine's growing economy is unsettling and, as a business owner myself, I can tell that people are paying attention now, more than ever.

From mandatory sick time for part-time and seasonal workers to mandates that will significantly increase the cost of health care coverage and workers' compensation insurance, there's no shortage of anti-business proposals backed by the majority party in Augusta right now.

Sen. Jeff Timberlake

In fact, by my latest count, 46 bills, backed by Democrats in Augusta, are still being worked on today.

Their message is loud and clear — if you sign a paycheck, you are greedy; and if you earn a paycheck, you are a victim. Bill after bill unnecessarily pits employers against employees and vice versa.

Recently, the Portland Press Herald published a letter to the editor about the restrictive scheduling bill to require businesses with five or more employees to set their staffing schedules for hourly employees 14 days in advance. Deviations from the schedule could result in a penalty, even if it is to accommodate the employee utilizing their newly mandated sick leave.

Fortunately, the Labor and Housing Committee swiftly voted to kill that oppressive bill following the public hearing after hearing strong opposition from the business community. It's sad that so many people had to take the time to travel to Augusta or hire a lobbyist to defend their business from such a ridiculous proposal in the first place.

Unfortunately, there is still an unprecedented number of bills currently before the Legislature that would drive small businesses, or all businesses, out of business.

This year alone, 25 bills have been submitted to change the workers' compensation system. When taken into account together, there is the potential to completely overthrow the current system that has been protecting injured employees in Maine for nearly 30 years now. According to the Maine Chamber of Commerce, based on a review of just a few of the bills, premiums would increase between $15 million and $23 million if they became law.

As I said before, Senate Republicans are closely following nearly 50 bills that are still alive today with the potential to significantly damage Maine's growing economy. While it is difficult to pick out the worst of the worst, these five are the cream of the crop, in my opinion.

LD 369 — Mandate that businesses with five or more employees offer sick leave to the tune of one hour for every 30 hours worked. This benefit would be extended to all employees, including full-time, part-time, seasonal, temporary and even per diem.

LD 758 — Would change the work search requirement for injured workers to be the responsibility of the employer, not the employee.

LD 1204 — Would make Maine the only state with no cap on weekly disability benefits, making all injuries potential lifetime claims.

LD 466 — Would increase the diesel tax from 31.2 cents to 36.2 cents.

LD 1157 — Would increase the state gasoline tax by 10 cents per gallon between June 1 and October 31.

LD 1231 — Would impose a new 1-percent tax on the wholesale price of heating oil, propane, coal, kerosene and dyed diesel fuel that is intended for residential or commercial heating purposes.

While I am hopeful that the most damaging bills this year will be killed, it is clear that Maine is no longer "Open for Business." It is a good thing that sign has been removed.

Sen. Jeff Timberlake represents Senate District 22. He lives in Turner.

Facebook's activist shareholders are making another dramatic bid to oust Mark Zuckerberg and abolish the firm's share structure - Business Insider

Posted: 13 Apr 2019 07:39 AM PDT

Activist Facebook investors are again going to try to oust Mark Zuckerberg as chairman and abolish what they see as the firm's unfair share structure.

In a Securities and Exchange Commission filing on Friday, Facebook gave notice of its annual shareholder meeting on May 30 and confirmed the investor proposals that will be voted on during the event.

Among eight stockholder proposals, there are two that will be familiar to Zuckerberg and the rest of the board: Investors are making another attempt to force governance changes on the social network.

One is titled 'Stockholder Proposal Regarding an Independent Chair' and makes the case for Zuckerberg to be dethroned as chairman of the board, with an independent executive hired in his place.

Oust Mark Zuckerberg as chairman

Business Insider broke the news of the proposal in July last year after revealing the plans of activist shareholder Trillium Asset Management, which had grown tired of the "mishandling" of scandals including the Cambridge Analytica data breach.

Read more: These investors control $3 billion of Facebook stock — and they want to take Zuckerberg down

Responding to the proposal in the SEC filing, Facebook called on investors to vote it down.

"We believe our board of directors is functioning effectively under its current structure, and that the current structure provides appropriate oversight protections," Facebook said.

"We do not believe that requiring the Chair to be independent will provide appreciably better direction and performance, and instead could cause inefficiency in board and management function and relations."

Getty

The chance of it becoming a reality is extremely slim, despite it being backed by investors that control around $3 billion of Facebook stock. A similar proposal in 2017 was popular among independent investors but was crushed because of Zuckerberg's voting power.

This is because of Facebook's dual-class share structure. Class B shares have 10 times the voting power of class A shares, and it just so happens that Zuckerberg owns more than 75% of class B stock. It means he has more than half of the voting power at Facebook.

Rip up the share structure

Zuckerberg's weighty power is why activist shareholders want to abolish the share structure. At the annual investor meeting, they will have the chance to vote on a proposal, which calls for the introduction of "fair and appropriate mechanisms through which disproportionate rights of Class B shareholders could be eliminated."

It said: "Fake news, election interference, and threats to our democracy -- shareholders need more than deny, deflect, and delay. We urge shareholders to vote FOR a recapitalization plan for all outstanding stock to have one vote per share."

It is not clear which investor has drawn up the proposal, but Facebook again calls for it to be dismissed by shareholders, as they have during the last five annual meetings. "We believe that our capital structure is in the best interests of our stockholders and that our current corporate governance structure is sound and effective," it said.

Facebook will almost certainly get its way. But the two investor proposals mark continued dissatisfaction among shareholders about the way Facebook is run following a year from hell for the company. It also shows that investors continue to believe that Zuckerberg has too much power.

No comments:

Post a Comment