The Eastside Guy Discrimination in the Rose City
Maria Lynn Lim
Article from Brainstorm NW, by Dave Lister August, 2005
In Portland, we honor cultural diversity. All races and creeds exist together in a harmony unparalleled in most American cities. Blacks, Hispanics, Asians, and Caucasians participate equally in community activities and the political process, and there are special activities to celebrate them all. Gays and lesbians find a tolerant home in Portland, and same sex households are a common in the city’s neighborhoods as more traditional families. There is almost no discrimination, with one notable exception:
In Portland, we discriminate against business owners.
Back in the 1920s, when my uncle and his partner were trying to eke out a living by wholesaling tools and hardware to local merchants off the back of a Model-T truck, they were accosted by a police officer. The officer asked to see their “peddler’s license”. Because they didn’t have one, and didn’t know they needed one, they were restricted from doing business until they obtained one. Over the years the “peddler’s license” evolved in the “business license.” In most jurisdictions around the nation obtaining a business license involves making an application and paying a nominal annual fee.
Portland and Multnomah County have, over the years, departed from this traditional method of licensing businesses and have created a combined “Business Income Tax/Business License Fee” (BIT/BLF). This system, which provides the city with about 15 percent of its general fund, punishes profit and wealth creation. It also punishes entrepreneurship by capping a business owner’s “fair” salary and taxing them on the excess. It is a system of wealth redistribution in the best Euro-Socialist tradition.
The BIT/BLF works like this: The city and county get 3.65 percent of your net profit, and 3.65 percent of the owner’s compensation in excess of $57,500 per year. In the tradition of the “peddler’s license,” you pay a minimum of $100 per year regardless of profit. A start-up restaurant, latte stand or second hand boutique pays $100 per year. Successful business consulting firms, law firms or insurance agencies can pay thousands. This taxing structure has been a significant factor in the loss of 30,000 downtown jobs over the last five years, and it is the number one issue raised when the city and county are described as being “business unfriendly”. And because your “peddler’s license” will cost you from $60 to $300 per year in Clackamas and Washington counties, firms that are not location dependent have left or are leaving. The contrast between vacant commercial space in downtown Portland and the booming professional plazas in Beaverton, Tigard and Tualatin bears mute testimony.
Portland’s newly elected Commissioner, Sam Adams, vowed during his campaign to reform this tax. As and openly gay man, perhaps Adams was more sensitive to discrimination than most. Or perhaps, as a city hall insider for the last decade, he had studied the diminishing revenue line of the tax and saw the writing on the wall. In any event, he chose to attack the BIT/BLF’s most discriminatory element: The compensation cap. Adams put forward to the Portland City Council a proposal to increase the cap to $125,000 annually. The proposal was co-sponsored by Commissioner Dan Saltzman. The largest turn out of suits and ties seen at a council hearing n recent memory showed up in support of the proposal.
Adams proposal was extremely modest. It would have returned four million to the local economy over several years. It was tied to future revenue increases. It was revenue neutral. It would have had no effect on the city’s operation budget.
Adams got spanked like the new puppy that piddled on the carpet.
“If we’re going to spend four million dollars to help small business,” he said, “I think we can do a better job ourselves through targeted program.”
The unstated philosophy, the one he shares with Mayor Tom Potter and Commissioner Randy Leonard, is that wealth redistribution is fair and good. People that make money and create jobs have more than they deserve and they should pay more. Never mind that the mayor, the city council, most top and mid-level city management, and police and fire officers pulling down overtime earn more than the business owner’s compensation cap. Never mind that a sole proprietor making the same exact salary a s a city commissioner pays $1,100 per year taxes that the commissioner does not. That’s not the point. They hold firm to their philosophy: we’re going to discriminate, because we can.
I think that since we’ve decided to have a discriminatory tax policy we might as well expand it. Let’s go after safe deposit box holders, or people that have more that one cat. Maybe we should tax people who like mustard in their scrambled eggs, or guacamole. Maybe people who attend air shows. I think it makes as much sense as taxing people who create jobs.
But what the heck do I know? I’m just an Eastside Guy.
Posted by Maria Lynn Lim on August 12, 2005
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