Steve Novick explains the "stampede" of businesses to Oregon

Just kidding, folks: "No, there is not a Vancouver dermatologist named Jim Dunning ..."

The mysterious and elusive Jim Dunning

At BlueOregon, Steve Novick writes a man-bites-dog story of Washington businesses forming a "stampede" to relocate to Oregon:

632 Washington business owners announced today that they were moving their businesses across the river to Oregon, after the Washington Legislature announced plans to increase the Business and Occupation Tax - in effect, a gross receipts tax - on service businesses from 1.5% to 1.8% in order to balance the state budget.

"Many of us started thinking about making this move a few months ago, when we started reading about the Measures 66 and 67 campaign and discovered that Oregon was planning to adopt an alternative minimum tax that looked sort of like the B&O tax, but was only 0.1% or a flat $150," said Vancouver dermatologist Jim Dunning. "We had no idea that before this, Oregon had nothing like the B&O tax at all. Now that Washington's raising the B&O tax even higher, we'd be fools - not just in April but year 'round - to stay in Washington State another minute."

Interesting story ... And all the more interesting because there appears to be no one by the name of Jim Dunning licensed to practice dermatology in the entire State of Washington.

Over at Oregon Business, managing editor Ben Jacklet has dropped the gauntlet to any businesses who claim that Measures 66 & 67 have caused them to relocate out of state.

Once I get such a name, on the record, I promise to explore in great detail the specific reasons behind that person's departure .... I think that would make a great story, but to get started I'll need some proof that people are indeed leaving because of the taxes.

Let's see if Mr. Jacklet turns his attention to report all sides of the story.

Oregon's new taxes spark an entrepreneurial crisis

The Oregonian reports that for a couple of hours, the 75 or so investors, entrepreneurs and elected officials gathered at Portland's World Trade Center.

Eric Pozzo, who manages the Oregon Angel Fund, which screens and invests in startup companies, said potential investors have to ask themselves now, "Why would I choose Oregon with our tax structure?"

Wayne Embree said his seed-stage investment firm was considering leaving the state, depending on the advice he and his partner get from tax experts about the impact of Oregon's new tax structure on his fund's investors.

"These guys," muttered Embree, referring to the proponents of Measures 66 and 67, "have no idea what they've done."

Even political activist Steve Novick, the relentlessly cheerful advocate of Measures 66 and 67, showed a trace of regret last week, writing on BlueOregon: "If there are ways to make some of these folks feel more valued, we should try them out. If we can convince even a few of the few to stay, that's a good thing."

Welcome to Exit Oregon: A Lesson from Maryland

Welcome to Exit Oregon, where we chronicle the exodus and extermination of Oregon business.

When Oregon was debating its permanently higher income taxes on business and high income household, proponents of the higher taxes said that only Big Out-of-State Banks would be affected. In fact, its the home-grown businesses--both profitable and unprofitable--that are hit hardest.

Now, one of the most vocal advocates of the new permanent tax increases is backtracking on the higher taxes. Apparently, he is worried that Oregon will be perceived as unfriendly to business.

Oregon is not a pioneer in soaking businesses and "the rich" to fund an ever growing government. Maryland tried the same thing and found out that the higher taxes actually reduced tax revenues. (So it seems there really is a Laffer Curve). From the Wall Street Journal:

A Bank of America Merrill Lynch analysis of federal tax return data on people who migrated from one state to another found that Maryland lost $1 billion of its net tax base in 2008 by residents moving to other states.

Oregon's tax advocates point out that the recession probably knocked off Maryland's millionaires. That is partially true but, in fact, many of the missing millionaires have simply disappeared from the state:

One-in-eight millionaires who filed a Maryland tax return in 2007 filed no return in 2008. Some died, but the others presumably changed their state of residence. (Hint to the class warfare crowd: A lot of rich people have two homes.)

Stayed tuned for more.