Among the many provisions in the $2 trillion CARES ACT passed by Congress in March are three tax breaks aimed primarily at high–earners and big businesses. Roughly speaking, the tax breaks will let investors and businesses increase the amount of loss they can write off against other tax liabilities. Oregon’s tax code is tied to the federal tax code, so normally, changes made by Congress are applied to Oregon taxes, too.
The Legislative Revenue Office said those three tax breaks will cost Oregon’s government more than $102 million during the next two-year budget period. District 3 State Sen. Jeff Golden said that doesn’t make sense in this time of crisis.
State Sen. Jeff Golden, D-Medford, listens to arguments on the floor of the Oregon Senate on Monday, Jan. 14, 2019. Golden is among the Oregon lawmakers pushing to void a trio of tax breaks that were a part of the federal CARES Act.
Bradley W. Parks / OPB
“When revenue is going to be so hard to come by and we have so many needs, we shouldn’t let these tax breaks that skew so heavily to the wealthiest go through,” he said.
Golden said that money would be better spent on helping struggling small businesses.
He’s among a group of lawmakers trying to persuade their colleagues to disconnect the state tax code from the federal code for those three tax breaks.
Opponents of eliminating the tax breaks say it would hurt businesses during an economic downturn.
But Golden said it’s important to understand who will benefit and who will lose if those tax breaks are kept in place.
“So, it’s a matter of, do we use this $100 million-plus for Oregon small businesses who need it?” he said. “Or let it go to the wealthiest, who’ve been pretty unscathed by COVID?”
If the tax breaks were to be disallowed under the Oregon tax code, eligible taxpayers could still claim the breaks on their federal returns.
Golden said the group plans to push for disconnection when the Legislature convenes later this month.