[5]
By Oregon Business & Industry,
Continued decline: The nonpartisan Tax Foundation released its annual State Tax Competitiveness Index [6] today, and Oregon extended its multiyear decline. The state’s overall ranking for tax competitiveness fell two places, to 37th, and its rankings fell in three of the five subcategories that contribute to the overall ranking. Oregon’s rankings remained the same in the other two. Oregon’s overall tax competitiveness ranking has dropped a staggering 29 places since 2020, when the state ranked eighth.
Category rankings: The Tax Foundation ranks states in five subcategories. Oregon’s rankings dropped for individual income taxes (44th), property taxes (32nd) and unemployment insurance taxes (43rd) and remained the same for corporate taxes (49th) and sales taxes (4th).
Competitive disadvantages: The Tax Foundation identified several factors contributing to Oregon’s low rankings, including a complex individual income tax system whose brackets are not fully indexed for inflation, exceptionally high income tax rates in Portland, an overly complex corporate tax system that combines corporate income and gross receipts taxes, and an estate tax with the lowest exemption threshold among states with such taxes. Oregon’s property tax burden relative to personal income is also fairly high and exceeds those in neighboring states California and Washington.
Other rankings and data: The precipitous decline in Oregon’s overall ranking coincides with its performance in CNBC’s annual America’s Top States for Business rankings [7]. Oregon’s CNBC ranking dropped from 18th in 2022 to 42nd in 2026 [8]. Since 2020, Oregon’s inflation adjusted median household income has declined [9], and its economy has grown more slowly [10] than the national average. And for six straight years, beginning in 2020, employment growth has trailed [11] the national average.
The takeaway: It has been clear for many months that Oregonians are unhappy with the direction of the state, and the reasons why are obvious. The state needs a thriving private sector to provide jobs, drive innovation and generate tax revenue, yet Oregon’s economy has been struggling for more than half a decade even as the state has become an even more expensive place to live and operate a business. Having secured another four years in office, Gov. Kotek has an opportunity to bring together business leaders, legislators from both parties and stakeholders to develop practical solutions to the well-known problems that have weighed on Oregon’s economy and limited opportunities and prosperity for Oregonians.
Learn more: OBI’s Oregon Competitiveness Agenda [12] offers dozens of proposals to improve Oregon’s economy, many of them aimed at the very competitive disadvantage highlighted by the Tax Foundation. The report [13] issued by Gov. Kotek’s Prosperity Council contains many worthwhile proposals as well. And for regularly updated data and rankings related to Oregon’s competitiveness, check out the Oregon Scorecard [9].