Oregon Lawmakers Propose Disconnecting From Trump Tax Laws to Prevent a $900 Million Hit to State Revenue

Tax cuts proposed in President Donald Trump’s One Big Beautiful Bill Act will cost Oregon an estimated $900 million, but two Democratic lawmakers are proposing to save the bulk of the loss in state tax revenue this biennium.

Oregon Must Disconnect From Trump’s Sprawling Tax Laws

Senator Anthony Broadman of Bend and Representative Nancy Nathanson of Eugene unveiled their proposal to generate $342 million in revenue this biennium, if Oregon disconnects from three of Trump’s sprawling tax laws.

Broadman and Nathanson propose that Oregon cancel three of the more than 100 tax breaks in Trump’s federal law – profits from certain stock sales, upfront write-offs for business machinery and equipment (bonus depreciation), and interest on some car loans.

The lawmakers’ proposal is made to counter the new federal tax laws that will significantly reduce Oregon’s tax revenue in future years. The state will also have to finance the increased administrative costs incurred when implementing the federal tax law.

Oregon is facing a $900 million tax loss in the current biennium because of Trump’s new tax law. The two lawmakers say that much of that amount will be preserved because their proposal leaves in place most of the tax breaks copied by the state. Oregon duplicates the bulk of the federal tax law and federal tax breaks.

Senate Bill 1507 Counters Negative Repercussions

To counter any negative repercussions from their proposal, Broadman and Nathanson propose funding $25 million in tax concessions to businesses that create jobs in the state, and $26 million to increase tax credits for low-income workers.

Broadman and Nathanson, who chair the House and Senate Revenue Committees, believe their bill will net the state $291 million this biennium.

Oregon is Facing the Loss of Billions of Dollars in Federal Funding

The state government is preparing itself to withstand the loss of billions of dollars in federal funding. Most of the cutbacks will impact Medicaid and food assistance programs.

The two lawmakers propose closing tax loopholes for businesses that do not benefit Oregonians.

Eliminating the bonus depreciation will generate $267 million; ending capital gains tax cuts for investors will yield an estimated $39 million in income tax revenue; and ending the auto loan interest deduction will generate a further $36 million.

Broadman and Nathanson are also proposing to increase the size of tax concessions to families in the $20,000 to $35,000 annual income bracket to 45%.

However, the lawmakers face steep opposition to Senate Bill 1507 by the Oregon Business & Industry organization, which yesterday voiced its vigorous opposition to the proposal.

Trump’s Tax Law Primarily Benefits High-Income Households and Corporations

Finally, Trump’s new tax law primarily benefits high-income households and large corporations. Bonus depreciation alone delivers the vast majority of savings to businesses with significant capital investments.

Over 80% of bonus depreciation claimed by corporations from 2018 to 2022 went to businesses earning more than $1 billion annually.