By Dr. Eric Fruits,
In February 2008, the Oregonian’s website had a posting with the title: “Business energy tax credits going bonkers.” What was meant by “bonkers” was Oregon’s Legislative Revenue Office projections that tax breaks under the Business Energy Tax Credit (BETC) program would cost the state $80 million in tax revenues by FY 2009-11.
What a difference a year makes. The Oregonian has a front page story with the headline “Cash is blowing, or blown, in the wind” (print edition) and “Oregon exceptionally generous with green-energy subsidies” (online edition). The latest projects put the cost of the BETC program at $144 million in tax revenues in FY 2009-11.
How much is $144 million?
If that money were collected by the state instead of given away, corporate income tax revenues would be almost 17 percent higher.
What if the tax breaks were given to all businesses?
If all businesses with less than $1 million in taxable income were exempt from state income taxes, the state would lose less money than it gives away under the BETC program.
The state income tax rate could be reduced to 5.5 percent (down from the current 6.6 percent) and the state would lose less money than it gives away under the BETC program.
— For more go to http://www.econinternational.com/blog/