No surprise

When lawmakers sought to shore up a battered state budget in January 2010 by raising taxes on well-to-do residents and corporations, opponents warned darkly that businesses would flee the state to escape the higher tariffs. More than a year and a half later, there is no evidence that any business actually did so.

That's no surprise to us. We opposed Ballot Measures 66 and 67 at the time, because we felt they unfairly targeted businesses during a recession and a more broad-based approach would have been better. But it never made sense to us that the additional taxes would be so onerous that business owners would pull up stakes and take the costly step of moving their operations to another state.

Measure 66 boosted taxes on income above $125,000 for individuals and $250,000 for couples. Measure 67 increased the corporate minimum tax from a woefully outdated $10 to $150 for S-corporations, LLCs and LLPs, and increased rates on profits and gross sales for C-corporations.

The business community still isn't happy with the new taxes, but there is no evidence any corporation has left the state as a result.

There is still plenty of grumbling that Oregon is anti-business. But Lithia Motors Chairman Sid DeBoer, who heads a nationwide chain of auto dealerships, acknowledges that while this is not the best state in which to do business, neither is it the worst.

Among the loudest voices raised in complaint was that of Bruce Hough, president and chief executive officer of Medford-based ComNet Marketing Group.

Hough threatened to take his business elsewhere in the wake of 66 and 67 passing, but so far has not done so. He did start a company called Impact Marketing Inc. in Reno, Nev., last July with $750, but so far the company seems to exist in name only.

It's interesting to note that State Rep. Sal Esquivel, R-Medford, who works for Hough, is listed as a director of the Reno startup. Esquivel opposed Measures 66 and 67, as did many of his Republican colleagues, but it's disappointing that an Oregon lawmaker would become involved in a venture that could lead to moving Oregon jobs to Nevada.

Oregon remains a hospitable place to live and to do business, despite overheated rhetoric from some in the business community. A study last year by the consulting firm Ernst & Young found that even after measures 66 and 67, Oregon had the fifth-lowest business tax burden in the country, and 33 states still had higher per capita taxes.

Oregon does need to address its lopsided, volatile tax system, and to reform the irrational "kicker" law that prevents the state from banking tax revenue in good times.

But it seems clear that Oregonians need not fear a mass exodus by corporations.

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