By Oregon Business & Industry,
Oregon’s freefall: On Oct. 30, the nonpartisan Tax Foundation released its annual State Tax Competitiveness Index, which dropped Oregon’s ranking to 35th nationally. As recently as 2019, Oregon’s overall ranking was 7th, indicating a 28-place plunge in only seven years. Check out our blog post on the latest rankings here and the index itself here.
Oregon is an outlier: The Tax Foundation subsequently produced a graphic (here) showing which states have experienced the greatest ranking changes since 2020. It is sobering. No state has experienced a bigger drop in the rankings than Oregon over the past six years. Oregon’s decline over that period – 27 places – is more than double that of Washington, which saw the second largest decline – 12 places.
Why it matters: Businesses invest in states that provide the conditions they and their employees need to succeed. Oregon’s rapidly eroding tax structure effectively pushes businesses to invest elsewhere. Jobs, philanthropy and tax revenue follow.
Behind Oregon’s fall: Why has Oregon fallen so far? Primarily because, the Tax Foundation explains, the state “adopted a modified gross receipts tax in addition to its normal corporate income tax. This new tax has relatively high rates, which compounds the tax pyramiding caused by typical gross receipts taxes.” Additionally, the Tax Foundation notes, other states have improved the competitiveness of their tax structures.
Improvement is possible: To become more competitive, Oregon must fix its business climate, beginning with its tax structure. OBI’s Oregon Competitiveness Agenda contains many suggestions to that end. So does the Tax Foundation, which explains some of the things the states that have boosted the competitiveness of their tax codes the most since 2020 have done. Over this period, for example, Tennessee’s ranking has improved even more dramatically than Oregon’s has fallen.
What they’re doing: Read the Tax Foundation’s full blog post here.
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