Head of small-business panel warns Oregon that taxes are driving industry away

Oregon is already famous, or infamous, for the invitation of a former governor to ''come visit us, but for heaven's sake, don't stay.'' Now it is being warned that its antibusiness bias is showing.

An emphatic warning that taxes are driving out business has come from the chairman of Republican Gov. Victor G. Atiyeh's small-business development panel, who says the state's relatively high corporate and personal income tax load is too much.

R. W. deWeese, prominent in business and philanthropic circles here for many years, has backed up his warning with action. He has moved a new company he heads out of Oregon and into Utah ''simply because it will have a lower cumulative tax burden.''

One of Mr. deWeese's major contributions to business development in Portland was the formation, in 1974, of Odyssey Productions Inc. The firm quickly became an award-winning producer of advertising audio-visuals and other films and was subsequently sold to its employees.

DeWeese now is active in the affairs of eight local businesses, and also gives time to 11 civic groups.

''Legislative attitudes, actions, and inactions are drving companies out,'' deWeese says. ''Furthermore, they are responsible for keeping out companies that may have thought of coming to Oregon.''

The legislature, deWeese says, ''doesn't recognize the consequences of its (tax) actions.''

His call for improvement in Oregon's tax climate won immediate support from the state's largest newspaper, The Oregonian, in Portland.

''If the message of R. W. (Bill) deWeese, chairman of Gov. Vic Atiyeh's blue-ribbon panel on small business development, does not spur Oregon's legislators and Atiyeh himself, to move toward reform of Oregon's unbalanced tax system, nothing will,'' the paper's editorial declared.

The paper noted that in announcing removal of his Catheter Technology Corporation to Salt Lake City, deWeese cited ''Oregon's higher income tax, workers' compensation rates, property tax, unemployment tax, and, for the Portland area, the mass transit payroll tax.''

Furthermore, the paper said, deWeese's frustration with tax inaction ''must not be dismissed as casually as Atiyeh appears to have done.''

Another sore point with deWeese is Oregon's unitary tax law, under which - similar to laws in another 12 states - domestic and foreign operations of a company are lumped together and a percentage of that total is taxed in the same proportion as the company's labor costs located in the particular state.

This unitary law also is opposed strongly by Japanese firms seeking to do business in the United States. Recently, the unitary tax may have played a part in the decision to locate production facilities and headquarters of S. E. H. America Inc., in Vancouver, Wash., and not Oregon or California, both unitary tax law states. The firm is a subsidiary of Shin-Etsu Handotai Company Ltd. of Tokyo, the world's leading producer of silicon wafers for the electronics industry.

In his opinion, deWeese said, ''the gut issue is economics. Oregonians are simply kidding themselves when they talk about 'the quality of life' in the state.''

Prior to the decision to move, deWeese and his associates commissioned a study by the Landsing Corporation of Menlo Park, Calif., of cities in six states - Arizona, California, Utah, Idaho, Washington, and Oregon - based on a wide range of factors. It was results of this study that tipped the scale in favor of Utah and Salt Lake City.

The study reported that Oregon, to keep businesses in the state, should eliminate its capital gains tax; allow full offset of federal income taxes; and adopt a consumption tax as part of a balanced tax system, with corresponding reductions in income and property taxes.

The legislature, in a current special session, has been wrestling with the question of a sales tax to offset income and property taxes, but has shown little inclination to get on with a vote.

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