Capital Gains Taxes

Background

For the past four sessions, the business lobby has been trying to lower Oregon’s capital gains tax rate down to around the federal government’s capital gains tax rate. During the 1999 session, a bill passed the Senate that lowered the tax rate to five percent, but the bill was stalled in the House. During the 2001 session, SB 67 passed both chambers and would have lowered the capital gains tax rate for corporations and persons to four percent. Governor Kitzhaber vetoed SB 67. During the 2003 session, a capital gains discussion arose again, but it was held off by the tax reform committee. In 2005, HB 2332 would have cut both the personal and corporate capitol gains tax rate in half. This bill was blocked in the Senate.

Issue

In Oregon, the capital gains tax rate is six percent for corporations and nine percent for individuals. Lowering the capital gains tax rate encourages people to invest and reinvest in Oregon’s economy and Oregon’s businesses. Taking away penalties for selling stocks to reinvest would allow economic forces to move more freely. In the past, capital gains taxes were thought to be paid only by higher income Oregonians. In today’s economy with mutual funds and greater access to the stock market, the capital gains tax affects a greater number of Oregonians.

ORA Position

The Oregon Restaurant Association supports lowering the state capital gains tax rates to at least the level of federal capital gains tax rates on corporations and individuals.