Portland City Councilors Seek to Raise Taxes on Companies With Highly Paid CEOs and Exempt More Small Businesses From Business Tax

Two Portland city councilors are seeking to increase the city’s existing surtax on companies whose CEOs are making much more than their average employee, and at the same time increase the existing threshold so that fewer businesses overall would pay into the city’s Business License Tax.

The two changes, Councilors Angelita Morillo and Mitch Green said in a statement this week, would spare 18,000 small businesses from paying the BLT and at the same time hike the CEO surtax for about 400 larger businesses.

The proposal would generate an additional $72 million for the city’s general fund annually, the two councilors say.

The city’s BLT currently imposes a 2.6% tax on net income for businesses with annual revenues of at least $75,000. An additional surtax is currently tacked on for companies whose CEOs are paid at least 100 times more than their average employee.

Under the Morillo-Green proposal, the threshold for paying the BLT tax would increase to $500,000 in gross revenue, which by their telling would drop about 18,000 businesses off of the tax rolls.

At the same time, the surtax would greatly increase under the proposal. For companies whose CEO makes between 50 and 75 times more than the average employee, the surtax would be 25%. That would equal a total BLT owed by the company of 3.25% on net income.

For a company whose CEO is paid 500 times or more of the average employee’s salary, the surtax would be 500%, resulting in a 15.6% total BLT on net income.

The Business License Tax makes up about one-quarter of the city’s general fund annually, but it’s historically been volatile and therefore a source of major frustration for city leaders trying to fill gaps in the tight city budget.

“The huge corporations targeted by this tax have profited greatly from public investment. They use our roads, our water, our power, and our talent pool in order to turn massive profits,” Green said in a statement. “It’s time we started making them pay their fair share to close our budget deficit and maintain these shared resources that working-class Portlanders rely on.”

Morillo said megacorporations needed to “do their part, too.”

Portland Metro Chamber CEO Andrew Hoan in a statement said that the tax would just get passed onto consumers.

“Local taxes work like tariffs: the cost doesn’t vanish—it puts on a ‘big business’ name tag, slips into the checkout line, and leaves consumers holding the bill,” Hoan said. “Portland already has the highest business and personal tax rate in the nation. No matter how it sounds on social media, raising taxes (again) will make Portland more expensive. They claim to care about the cost of living while actively making our city less affordable.”

The City Council is set to discuss the proposal at the Oct. 8 meeting of its Finance and Governance Committee of the Whole.