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Next to Boeing’s wish list, Oregon’s Intel deal is a bargain

Wednesday, January 8, 2014

It may well be true, as some critics note, that Oregon didn’t get anything new last week for extending the 30-year “tax certainty” originally granted to Nike to Intel as well. Even Intel agreed that the $500 million in new investment in its Hillsboro location, and the 500 jobs attached, were on track to happen anyway…

… as Gov. John Kitzhaber told The Oregonian editorial board, it’s not costing Oregon anything, either. Oregon’s “single sales factor” tax formula, which taxes companies based only on their sales in Oregon rather than their worldwide receipts, has been law here since 1991…

Boeing, although it had received an $8.7 billion tax break pledge from the Washington state legislature to build the 777X airliner there, bridled at the local machinists’ union voting against reopening an eight-year contract in the middle of its term. So the airliner giant announced that it was opening the bidding to other states, and offered a list of incentives that might attract the megaproject to someplace such as Alabama or Missouri…

But the big-money-required auction Boeing has set out to conduct does reflect the style, not to say the desperation, of current state efforts to land a major job project. It’s a process of smokestack-chasing on steroids, and the stakes can rise to dizzying levels – in this case, 30,000-foot levels…

The Oregonian, December 13, 2014

Our Response & Your Comments

Lane Solutions neither endorses nor opposes tax breaks for corporations locating in Oregon. We just want to clarify the issue.

Luring companies to Oregon means buying them with a mixture of incentives – intangible and tangible. Intangibles include skilled workers and a good transportation system. Tangibles are usually tax relief.

The questions are the same as for a person buying a house: “Do I want it?” “What am I willing to give up for it? “What deal can I get before someone pays what the seller is asking?” “What if it’s not what I thought I was buying?”

Governments ask the same questions: “Is this a fit for Oregon?” “How much revenue can we concede and eventually recoup it via taxes?” “Does Alabama want it?” “What if we don’t get the promised jobs?” The last is crucial.