Tax calculator

With their ballots in hand, Oregon voters are weighing the two proposed tax increases, Measures 66 and 67. At the same time, campaigners, bloggers, TV ads and the media are putting out a blizzard of information, some of it contradictory, much of it confusing. Here are the basics to help sort through the noise.

Measure 66

Q: Who would pay?

A: Households with taxable income of $250,000 or more and single filers with taxable incomes above $125,000.

Q: How much would this add to their tax bills?

A: Right now, nearly all Oregonians' income is taxed at 9 percent. For the high-income people specified above, any taxable income above $125,000 (single) or $250,000 (taxpayers who file

jointly or are head of household) would be taxed at a higher rate of 10.8 percent. For those who earn more than twice that much taxable income ($250,000 single or $500,000 joint), earnings above those figures would be taxed at 11 percent.

Q: Give me examples.

A: Let's say a family took in $320,000 in 2009, had $20,000 in deductions, leaving it a taxable income of $300,000. It would pay an additional $900 in state income taxes under Measure 66. A family that made $40,000 would pay no additional taxes, nor would a family that made $200,000. A family with $2 million in taxable income would pay $34,500 more in state taxes.

Q: How many people would pay more taxes?

A: The Legislative Revenue Office estimates about 2.5 percent of all Oregon tax filers would see an increase in their taxes, or about 38,000 out of 1.5 million filers.

Q: Are these permanent increases?

A: They apply to tax years 2009, 2010 and 2011. As of 2012, the marginal rate for income above $125,000 (single) and $250,000 (household) would drop to 9.9 percent.

Q: Would anyone see their taxes decrease?

A: Yes. People receiving unemployment checks. The measure would exempt the first $2,400 from state taxes.

Q: Any other effects?

A: Yes. The ability to subtract federal taxes would phase out for single filers making between $125,000 and $145,000 and for joint filers making between $250,000 and $290,000. This would add as much as $500 to those taxpayers' Oregon tax bill.

Measure 67

Q: Who would pay?

A: This is more complicated. The measure applies to corporations doing business in Oregon, but it applies differently to different types of corporations.

Q: Different how?

A: The biggest change is for businesses that are organized as C-corporations -- those allowed to have an unlimited number of shareholders and considered distinct entities for tax purposes. S-corporations, partnerships and Limited Liability Corporations would see fewer changes.

Q: So, who pays what?

A: Let's start with C-corporations. There are about 34,000 of them in Oregon, and about 25,000 -- or about two-thirds -- report no profits on their Oregon sales and pay a minimum state income tax of $10. Measure 67 uses a sliding scale to increase that minimum, depending on their Oregon sales. The scale ranges from a low of $150 to a maximum of $100,000.

Q: Can you give me some examples?

A: A corporation with Oregon sales of $500,000 or less would pay $150. Those with sales between $1 million and $2 million would pay $1,000. Sales between $7 million and $10 million result in a tax of $7,500. Sales of over $100 million would mean a tax of $100,000.

Q: To be clear, that means that a C-corporation that reports no profits could still pay taxes?

A: Yes. The tax equals one-tenth of 1 percent of a corporation's sales. A company that reports $75 million in Oregon sales, but no profit, would pay $75,000 in taxes.

Q: How many corporations would have to pay the $100,000 minimum tax?

A: The state estimates 104. Of those, 77 are companies based out of state.

Q: What about profitable C-corporations – what would they pay?

A: Net income -- or profit -- up to $250,000 would be taxed at the current rate of 6.6 percent. Profits above $250,000 would be subject to a higher rate of 7.9 percent.

Q: How many C-corporations would pay a higher tax on their profits?

A: Fewer than 1,700, or about 5 percent.

Q: What kind of businesses are we talking about?

A: Banks, insurance companies, utilities, retailers and wholesalers account for most of the corporations with the biggest sales or profits in the state.

Q: What about S-corporations, partnerships and LLCs?

A: Partnerships and LLCs, which pay nothing now, would pay $150. S-corporations would see their taxes go from $10 to $150.

Q: And these are permanent increases?

A: The higher minimum taxes would be permanent. The higher marginal rate on corporate profits, however, would decrease to 7.6 percent for 2011 and 2012. Starting in 2013, the current tax rate of 6.6 percent would apply to all net income up to $10 million. Income above that amount would be taxed at a rate of 7.6 percent.

Q: Any other effects of the measure?

A: Yes. The measure also would increase fees businesses pay to register with the state. In addition to the current $50 flat annual rate, in-state companies would pay another $50 and out-of-state companies another $225.

Q: I've heard these tax increases are retroactive.

A: Yes, both measures would apply to the 2009 tax year.

Q: How much money would the measures raise?

A: An estimated total of $727 million. Measure 66 would raise $472 million; Measure 67 would raise $255 million.

Q: How would the money be spent?

A: The Legislature, which approved the tax increases last June, already has allocated the money as part of the $14.3 billion general fund budget for 2009-11. Most of the money would pay for public schools, health care and public safety.