(PORTLAND, Oreg.) — The Portland city council is considering a tax increase on large corporations while providing relief to approximately 18,000 small businesses.
The Portland City Council Committee of the Whole convened on October 8th, 2026, primarily to debate and consider amendments to the Business License Law Code, specifically the 'Fair Share Tax' ordinance.
Photo credit: YouTube / eGov PDX
This legislation aims to provide significant tax relief to approximately 18,000 small businesses by increasing their gross receipts exemption from $75,000 to $500,000, while simultaneously increasing the CEO Pay Ratio Surtax on about 405 large publicly traded corporations.
The estimated financial impact is an average saving of $900 per small business, totaling $14 million that would remain in the local economy, and a projected incremental revenue increase of $33 million annually for the city from the surtax (a conservative estimate from an initial $72 million).
The policy aims to address severe wealth inequality, create a progressive tax structure, raise revenue for core city services amidst austerity budgets, and incentivize better business practices by discouraging exorbitant executive pay and encouraging higher wages.
Public comments overwhelmingly supported the Fair Share Tax, citing the struggles of small businesses, the necessity of funding public services, and the moral imperative of making large, highly profitable corporations contribute more to the community.
Tim Shaw, co-owner of Bold Coffee and Books in Goose Hollow, strongly supported the Fair Share Tax. He detailed how his small business pays over $7,000 annually in various taxes and licenses, and that his bills increased by 5% in the last month. He contrasted this with Starbucks CEO being paid 1,800 times their median worker, whereas his business has a 1:1 ratio.
“Portland has so much to offer. It’s so beautiful. It’s so nice. And that is because of businesses like Fingers and Toes, Blue Star Donuts, The Hoff Café, The Goose Hollow Inn, and now Bold that make our community and the Goose Hollow area wonderful. You have the opportunity to bring back small businesses and allow this community to thrive,” Shaw said.
Brian Frank, an accountant and co-founder of Portland Businesses for All, expressed strong support for the Fair Share Tax, stating it will reduce burdens on micro-entrepreneurs and other small local businesses he works with daily.
“We can reduce one of the many burdens on small businesses here and have a more sustainable budget. Supporting fire departments, parks, city programs that actually help Portland owned and operated businesses,” Frank said.
Photo Credit: portland.gov
In a statement released after the meeting, Councilor Loretta Smith argued the policy fails to fix wage gaps and instead harms working-class families while sending the wrong signal to investors.
"While the authors talk about equity, this policy will squeeze everyday working families," said Councilor Smith. "If we make Portland tax-hostile, companies will relocate to Vancouver or Beaverton. Portland is open for business, and we must protect local jobs, municipal revenue, and checkout prices for residents already struggling with inflation."
Councilor Smith outlined three fatal flaws in the ordinance:
• Job Loss and Capital Flight: Massive surtaxes incentivize major employers to relocate headquarters and operational hubs outside city limits, destroying both administrative and entry-level jobs.
• Higher Costs for Families: Rather than absorbing the tax, retail, grocery, and utility chains routinely pass local tax hikes directly to consumers, artificially driving up the cost of living.
• Unstable Revenue Model: Relying on punitive taxes creates a volatile budget stream. If targeted companies shift compensation structures or leave Portland, projected city revenues will collapse.
"Our local government should focus on core municipal responsibilities like infrastructure, community safety, and getting our fiscal house in order," Councilor Smith added. "We need an economic outlook that fills hotel rooms, builds local commerce, and recruits convention business to our city, not a short-sighted penalty tax that scares employers away. Portlanders deserve stable, transparent leadership that protects their paychecks and keeps our economy moving forward."
Discussions and a final vote are expected to take place in the coming weeks.
If you would like to comment on this report, please email me at rory.h@lead4earth.org.
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