Oregon consumers would not take a hit if tax measure passes

Saturday, July 30, 2016
The Oregonian

"This fall, Oregon voters will decide whether to levy a new tax (Measure 97, formerly known as Initiative Petition 28) on the revenues of large corporations to fund additional education and health spending," writes Mark Paul, postdoctoral researcher at the Samuel DuBois Cook Center on Social Equity. "Heading into this vote, many will be asking one basic economic question: Who will pay this tax? Fortunately, we now have both economic theory and empirical data making it clear that the tax will be paid out of corporate profits, not consumers' pockets."

"Economic theory suggests that corporations will not attempt to pass the cost of the new tax on to consumers. Because the measure only affects corporations that do more than $25 million in Oregon sales, fewer than one-quarter of 1 percent of the businesses registered in Oregon will pay the tax; and because these huge firms compete with smaller firms unaffected by the tax, they will not be able to respond by raising prices without losing customers."

Read more: http://www.oregonlive.com/opinion/index.ssf/2016/07/oregon_consumers_would_not_tak.html