Business Columns & Blogs

Bill Virgin: Will West Coast go all in on weed? Other battles to watch on election night

Petition signature gatherer Peter Keyes, right, discusses a petition to legalize marijuana April 23 in Sacramento, Calif. For the second time in six years, California voters are being asked to legalize the recreational use of marijuana.
Petition signature gatherer Peter Keyes, right, discusses a petition to legalize marijuana April 23 in Sacramento, Calif. For the second time in six years, California voters are being asked to legalize the recreational use of marijuana. Associated Press file, 2016

You say you wish this delightful campaign season could go beyond Tuesday? You wish you had even more contentious issues to consider than the menu of tax, minimum-wage, gun-control and more-tax measures already on your ballot?

You’ve come to the right place, because today we’re going to wander beyond this state’s borders to peek at what’s on the ballot elsewhere.

Why would we care? Because those issues will either affect what’s going on in Washington or could well wind up on future ballots in this state.

Oregon has a number of local ballot measures pertaining to marijuana, but in California recreational marijuana legalization is on the statewide ballot, as well as in Nevada and Arizona (and on the other side of the U.S., Maine and Massachusetts). If the measures pass, it would create a solid West Coast bloc along with Washington, Oregon and Alaska with legal weed. That in turn would limit whatever marketing advantage local and state purveyors might have been counting on as a tourism promotion device.

In Oregon, the big-ticket item is Measure 97, which would increase Oregon’s gross-receipts tax on business (similar to Washington’s business and occupation tax). According to the Oregon secretary of state’s voters pamphlet, the measure would impose a minimum tax on businesses with at least $25 million in Oregon sales of $30,001 plus 2.5 percent of amount of sales above $25 million.

The campaign for and against the measure has been, Ballotpedia reports, the most expensive in state history. The business community is split. “For years, big out-of-state corporations have used loopholes and offshore tax havens to pay lower taxes in Oregon than in any other state in the country,” says a group called Main Street Alliance. “That means that Oregon’s small businesses shoulder a disproportionate share of the burden — with Oregon’s smallest businesses paying far more taxes as a percentage of their sales than the largest corporations do.”

“Measure 97 would make our Oregon craft products even less competitive against these mass-produced products because like most Oregonians we would pay Measure 97’s hidden sales tax,” counters a distillery. “Our small business doesn’t make a lot of money, so when prices increase for the staples that we buy to produce our Oregon craft products like grain, electricity, equipment, insurance, and bottles, we would likely be forced to increase the price of our products that make them less attractive to customers. Don’t be fooled by advertising that says that this is only a tax on big corporations. A tax this big doesn’t just fall out of the sky. We’ll all end up paying more for products and services we buy every day.”

Oregon has no sales tax, a concept that has been as radioactive there as the income tax is in Washington. But the unquenchable thirst for more revenue is driving government to hike old taxes and consider new ones. Making Oregon a more expensive place to do business might be advantageous for Washington, except that this state, especially in the Puget Sound region, is itself becoming much less of a low-cost, low-tax place to operate.

California voters, who will be busy with other ballot measures besides pot, also are confronted with a proposition to ban plastic bags statewide, and to control prescription drug prices by limiting state agencies to paying what the U.S. Department of Veterans Affairs does.

Washington is not alone in considering a minimum wage hike via the ballot. Three other states have similar measures, including Arizona.

In California voters are being asked to extend a tax on incomes of more than $250,000, and to add another $2 to the per-pack tax on cigarettes. In Colorado, Amendment 69 would impose a 10 percent payroll and income tax to fund a public health care system. The Tax Foundation says the proposal would give Colorado the nation’s highest individual income tax rate, surpassing California.

That organization also reports that Boulder, Colorado, and three California cities — Oakland, San Francisco and Albany — are voting on proposals to impose local taxes on soda and other sugar-sweetened beverages. We’ve been through something similar with Seattle’s latte tax (rejected in 2003) and taxes on candy, bottled water and soda (repealed in 2010). But if more of those local measures are approved, supporters might be tempted to take another run at it in Washington.

We’ll end our road trip in, of all places, Missouri, where Amendment 4 would prohibit the state from extending the sales tax to services. Washington is another state where certain services (especially professional) don’t generate sales tax, but it’s always been a tempting target for those looking for more tax revenue.

Bill Virgin is editor and publisher of Washington Manufacturing Alert and Pacific Northwest Rail News. He can be reached at bill.virgin@yahoo.com.

  Comments