June 15, 1999

An Analysis of SB 535’s Proposed Corporate and Personal Capital Gains Tax Cut


In recent years, the tax treatment of capital gains income has been one of the most hotly contested issues in federal tax policy. This debate has recently spilled over onto the state level in Oregon with the consideration of SB 535.

Oregon’s personal income tax currently subjects capital gains to the same graduated rate structure as all other sources of income. SB 535 would create a separate, lower rate of 4 percent for income from capital gains, while still taxing wages, self-employment, and other income at the current higher rates. SB 535 would also reduce the corporate income tax rate on capital gains by over one third: from 6.6 percent to 4 percent. This analysis discusses the distributional and revenue implications of this legislation for Oregon residents.

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