The people's voice. [volume] (Helena, Mont.) 1939-1969, 1962-08-17
By LUCILLE SPEER,
Documents Librarian, MSU

The Better Bushes Climate memo
rial of the 1861 Legislature (HJM 3,
warned that "an excessive tax bur
den, discriminatory and punitive leg
islation and controls are incompatible,
with the growth of industry and EN-
ployment.'' Mindful of this advice, the
legislature passed no new tax legis
lation Except the tax on co-opera
tives). To carry on with existing
revenues, it drastically cut appropria
tions for education, health, custodia,
institutions, and public welfare ano
ignored such needed public services
as control of air and water pollution
Yet income and employment con-
tinue to lag. Is it possible that the
legislature overlooked some import
ant aspects of the better business
climate? A favorable business climate
is one which attracts industry, pro-
vides jobs, make possible adequate
community services, and raises the
levels of living for all the citizens
of the area. Many elements help to
create "the climate, though the in
dustrial planners would like us to
believe that taxation is the only fac
tor. What is the impact of taxes on
that climate?
In the State of Oregon, the major
source of state revenue comes from
the state income tax. A study of the
Legislative Interim Tax Study Com
mittee, 1957-1959, concludes that the
fairness and lack of discrimination
in the Oregon tax system is favor
able feature in the promotion of the
states economy. Gorgeous tax sys-
tenn is dedicated more than most to
the principles of the ability-to-pay
theory-the most widely accepted
principle of taxation"
Most business men and individ-
uals do not resent paying if they
can be shown that their taxes sup
port essential public services, and
if they can be shown that they are
not paying any more than their
fair share.
Oregon has a reputation for pro-
viding a high level of services. There
are many direct and indirect advan-
tages to business and industry de-
rived from the educational attain
ment, the high literacy rate and the
high standards of public health in
Oregon. Cheap taxation is not al
ways ideal, the study concludes, for
industries realize that low taxes often
increase business costs by failure of
the community to provide adequate
services.
The Oregon study says that ''there
seems to be little or no evidence that
state and local taxes have had any
influence on aggregate economic
growth :. 1t is possible that location
decisions which have been based on
state and local taxes as primary |
consideration have favored as much |
as they have disfavored Oregon"
The argument that state and
local taxes are a relatively unim-
portant influence upon industrial
development is based on the fol-
lowing analysis by the Oregon COM
mittee:
L. State and local taxes represent !,
q very small portion of total bust
ness costs. Studies indicate that such
axes represent only about per cent
If total costs.
2. The total state and local tax
burden is not as important as the
in tax burdens between
,ne site and another, since some
axes must be paid no matter where
IN industry locates. This apparent
between different sites
S probably less than 1 per cent of
.ross receipts for most businesses.
3. The apparent differential is
urther reduced because almost all
tate and local taxes are deductible /
n computing federal income tax liza
'ilities.
A. 1t is generally granted that there
5 correlation between the quantity
nd quality of public services received
nd the level of taxes paid. If the ,
difference in benefits from public
ervices are considered in addition
o actual tax differentials, the effect ,
f state and local taxes on industrial {
p