Kate Brown won. Mr. Nike gave a bazillion dollars to the loser. Can we now finally tax the bejesus out of Nike? —A Concerned Voter
One of the biggest applause lines at Gov. Kate Brown's victory party last week was, "And we showed that no one person can buy the governor's office in Oregon!" referring to the $2.5 million Phil Knight donated to Republican nominee Knute Buehler's campaign.
The retired Nike chairman didn't get his way (though, for the record, the company of which he no longer has day-to-day control actually backed Brown, to the tune of $85,000). Still, don't start storming Nike's coffers just yet.
You see, Voter, while regular schlubs like you and me have to pay whatever tax the government demands, for billion-dollar corporations, the official tax rate is merely a sort of quaint, archaic greeting, brushed aside as soon as companies threaten (overtly or implicitly) to take their jobs and relocate elsewhere.
This is more or less what happened in 2012, when Nike and then-Gov. John Kitzhaber negotiated a 30-year agreement to tax Nike's income based on the company's relatively modest in-state sales—rather than, say, on the size of its Oregon payroll (massive), or the amount of property it owns here (lots).
In return, the company—which currently employs 73,000 people worldwide and 12,000 in Oregon—agreed to spend $150 million to create an additional 500 jobs by 2017.
To put it another way, Kitzhaber's deal slimmed Nike's potential tax liability by an estimated 90 percent over 30 years in exchange for the company's promise to grow its Oregon workforce by approximately 0.8 percent a year over five years—something they were quite possibly planning to do anyway. With Democrats like these, who needs Republicans?
Still, don't be too hard on poor old Kitzhaber—if Oregon hadn't given away the farm, Nike would have found another state that would. This kind of jurisdiction-shopping is endemic to American capitalism, pitting state against state in a race to the bottom that benefits no one except the corporations.
States could band together to stop this practice, but getting all 50 to the table would be a heavy lift. If only there were some sort of national deliberative body with the power to regulate taxation on a federal level—but that's just crazy talk.