A lot has been written and said about Initiative Measure 97 on the Oregon ballot this November: some of it accurate and true, some of it patently false and misleading.
If enacted, Measure 97 would impose a 2.5% tax on all “C” corporations in Oregon with gross sales of more than $25 million in any tax year. “C” corporations are the large corporations that sell us our groceries, electricity, gasoline, cars, clothes and other daily essentials of modern life. In other words, Measure 97 is “a tax on sales”; i.e., “a sales tax”.
Of course, the corporations which pay this tax will pass the cost of the tax to those who buy goods and services from them. More surprising, as this brief note from the Tax Foundation illustrates, the corporations which pay the 2.5% tax will first add that 2.5% to their price and then add an extra 2.5% of tax they will pay on that initial 2.5% tax to increase their selling price by even more than the initial 2.5% tax that Measure 97 imposes. As the Tax Foundation note illustrates, the cost of a $100.00 item subject to the Measure 97 tax would not increase by just $2.50 (2.5% of $100.00) but by $2.56 after the 2.5% tax on $2.50 of the initial increase attributable to the tax is added into the price.
For all practical purposes Measure 97 is not only a sales tax but also a tax pregnant with the additional tax to buyers of everyday products and services to reimburse the corporations of collecting that sales tax.