Nike Lands Democrat Deal to Avoid Paying 'Fair Share' of Taxes

Nike employees donated almost four times as much to President Barack Obama's campaign as to Governor Mitt Romney, but the Oregon-based sneaker manufacturer appears uninterested in paying its "fair share" of corporate taxes.  

Democratic Governor John Kitzhber gave Oregon legislators just four days' notice that there would be an emergency session to authorize the governor to protect Nike's preferable corporate tax arrangement for up to 40 years.  Oregon lawmakers approved the bill in the hope that Nike will make good on its plan to create 500 jobs and invest in a $150 million expansion.  The measure will ensure that Nike's corporate tax rate will be calculated using only in-state sales.

Oregon Democrats struggled to explain their support for the measure.

“This bill is not a tax break. It is not corporate welfare. It is not a give away,” said Portland Democrat Rep. Jules Bailey. “It simply locks into place the methodology by which taxes are calculated.”

Beaverton Democrat Rep. Tobias Read said Nike was “an ideal corporate citizen” and therefore worthy of the special tax treatment.   

But some residents, like Susan Barrett, weren't buying it.  “Forty years is absolutely unconscionable," said Ms. Barrett. "Our future legislators in 40 years aren’t even going to be born yet.  If it’s true that this is so good for public schools, for funding, then why is it that in Nike’s hometown, Beaverton, class sizes are at 60 students right now?”

Others took issue with the Governor rushing the bill by calling an emergency session. 

"This is about prudent governance. The elected members of the Legislature should have adequate time before casting a final vote on this bill," said John Calhoun of Equity Alliance Oregon, a liberal business group.

Gov. Kitzhaber conceded that his use of the emergency session was not optimal.  "I've never had the occasion to call the Legislature into session at a time when probably 80 of them didn't know why they were coming in," said Gov. Kitzhaber. "It's an extraordinarily awkward process, not my first choice."

Nike, which is worth an estimated $45 billion, is one of only two Oregon companies in the Fortune 500.  The athletic footwear company employs roughly 8,000 Oregonians.


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