Gov. Brown Calls Special Session for Small Business Tax Breaks. Linthicum & Reschke See it Differently.
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Oregon State Capitol, File Photo (Brian Gailey)
After meeting with Democrat and Republican legislative leadership, Governor Kate Brown calls for a special session to adapt Oregon’s pass-through law to include the smallest businesses, sole proprietorship's, in the tax break afforded larger businesses.
This however, leads to question. It this everything that Governor Brown could have done for small business?
"If the Gov. was sincere about helping small businesses then she should have vetoed SB 1528.” Senator Dennis Linthicum (R-Dist. 28 - South Central Oregon).
"The Governors call for a special Legislative session in May is purely political theatre. Legislators just completed the 2018 Session in March where this should have been dealt with properly. The real emergency is merely her reelection, not Oregon small business," says E. Werner Resche (R-Dist. 56, Southern Klamath & Lake Counties).
Governor Brown's Statement:
“We have an obvious inequity in Oregon’s tax system that is prejudiced against thousands of small Oregon businesses, and a simple change can fix it. I’m simply not willing to let these main street businesses — entrepreneurs, mom and pops, and start-ups — go through another tax year with unfair tax treatment as compared to their larger competitors.
“An estimated 9,000 sole proprietorship’s could qualify and use this new opportunity to reinvest more of their profits into their businesses and employees. And with this new economic incentive many more could take advantage of the same tax break that larger businesses already enjoy. We’ve already seen the number of large companies that qualify increase since the pass-through law was first created just five years ago. Nine thousand may seem like a small number to some in Salem, but to these business owners and their employees, it makes a big difference.
“I’m calling for a special session on May 21 to make this change to keep our small businesses growing. Legislative days are already scheduled for this week so it will work for most legislators’ schedules and will keep additional costs to the state to an absolute minimum.
“It is important to do this now for our smallest businesses — waiting any longer will only cost the businesses themselves more money. If we want these thousands of businesses to qualify for this economic incentive for the 2018 tax year, this has to be done now and cannot wait. Administratively, any tax bill passed in the 2019 regular session would not take effect until October 2019 — long after 2018 taxes are filed.
“It is universally acknowledged that these small businesses are treated unfairly as compared to their competitors in Oregon’s tax system. Because of this I look forward to working with the Legislature to get this addressed now, for the 2018 tax year.”
"The special session is a needless waste of taxpayer dollars because the Gov. appears only to be grand-standing for headlines. She has identified, 9,000 possible small businesses for help while SB 1528 shovels dirt on the graves of 283,000 small taxpayers in OREGON," continues Senator Linthicum.
This may appear to be a party issue as Oregon House Speaker, Tina Kotek (D-Dist. 44, N/NE Portland) issued her own public statement. “The House stands ready to work collaboratively to consider reasonable improvements to our existing small business tax break. President Courtney [(D-Dist. 11, Salem)] and I plan to appoint a special joint committee that will meet prior to the special session to begin to hear proposed legislation,” states Kotek.
"It’s ironic for a Democrat governor to assemble a Democrat-led legislature to enact a Republican idea in a special Session, which is merely a feeble effort to fix a damaging bill that the Governor signed," says Reschke. "Oregon small businesses were granted a needed benefit from the 2017 Trump tax cuts. However, the Governor and Democrats passed SB 1528 to negate the Trump tax cuts. Now the Governor wants praise for allowing tax cuts to only 3% of Oregon’s smallest businesses.
Reschke concludes, "I will go to Salem on May 21st and once again explain in the special Session, that while small businesses in other states will benefit from the Trump tax cuts, 97% of Oregon's small businesses will receive no benefit. The current Democrat leadership in Oregon believes the $1 Billion generated by the Trump tax cuts (over the next five years) is best managed by politicians and bureaucrats instead of Oregon's entrepreneurs and small businesses.”