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Oregon Bill to Reverse Trump Tax Breaks Clears House Committee

  //business-finance.news-articles.net/content/202 .. rse-trump-tax-breaks-clears-house-committee.html
  Published in Business and Finance on Monday, February 9th 2026 at 17:35 GMT by Oregonian
      Locales: Oregon, UNITED STATES

SALEM, Oregon - February 9, 2026 - A contentious bill aiming to inject $300 million into Oregon's state budget by reversing three tax breaks originally enacted during the Trump administration has cleared a key hurdle, passing through the House Revenue Committee on Monday. House Bill 4003 advanced along strict party lines - a 9-3 vote - setting the stage for a potentially volatile floor debate and ultimately, a showdown that could significantly reshape Oregon's fiscal landscape.

The bill targets provisions within the 2017 federal tax law which Democrats argue disproportionately benefited Oregon's wealthiest residents and large corporations, while simultaneously depleting vital state revenue. The proposal seeks to repeal these measures, claiming they are fundamentally regressive and have exacerbated Oregon's budgetary challenges.

The three tax breaks under scrutiny are:

• Pass-Through Entity Deduction: This provision allows owners of pass-through businesses - commonly structured as partnerships or S corporations - to deduct up to 20% of their business income. Democrats contend this primarily serves to benefit high-income individuals who utilize this structure to reduce their tax burden.
• Bonus Depreciation: Currently, businesses can immediately deduct the full cost of qualifying assets (like equipment) in the year of purchase, rather than depreciating the cost over several years. Democrats argue this incentivizes short-sighted, potentially wasteful investment decisions and doesn't necessarily correlate with sustainable economic growth.
• Offshore Tax Loophole: This allows companies to defer paying U.S. taxes on profits generated overseas. Democrats argue it creates a perverse incentive for companies to shift jobs and profits to foreign countries, undermining domestic economic stability.

Republicans fiercely oppose the bill, arguing that the targeted tax breaks were crucial in stimulating economic activity and job creation. They believe rescinding these measures will stifle business growth, discourage investment, and ultimately harm Oregon's competitiveness. A central tenet of their argument is that the state legislature shouldn't attempt to counteract established federal tax policies.

"This is a blatant attempt to punish success," stated Representative Kim Wallan (R-Hillsboro) following the committee vote. "It's going to hurt Oregon businesses and make us less competitive. These tax breaks incentivized investment and job creation, and removing them will have the opposite effect."

Conversely, Democrats frame the bill as a necessary step to address Oregon's growing budget deficit and fund critical programs. The anticipated $300 million in revenue generated by repealing the tax breaks would be allocated towards initiatives focused on affordable housing, bolstering early childhood education, and accelerating climate change mitigation efforts. Supporters of the bill point to a widening gap between state revenue and increasing demands for public services as justification for the change.

Beyond the immediate fiscal implications, the debate surrounding HB 4003 reflects a broader ideological clash over the role of taxation in economic development. Democrats prioritize progressive taxation and social programs, believing in a robust safety net and investment in public goods. Republicans champion tax cuts and deregulation, arguing they foster entrepreneurship and economic expansion. This bill, therefore, has become a symbolic battleground for these competing visions.

The passage through the House Revenue Committee represents a significant, though by no means definitive, step. The bill is scheduled for debate on the House floor next week. Amendments are expected, and the final outcome remains uncertain. If the bill successfully navigates the House, it will then be forwarded to the Senate for further deliberation. The Senate, currently holding a slim Democratic majority, could present another significant obstacle.

Experts suggest the bill's ultimate fate will likely depend on the degree of compromise reached between Democrats and Republicans. Moderates within both parties may seek to forge a deal that preserves some of the tax breaks while increasing funding for key programs. However, the deep ideological divisions at play suggest a contentious path forward, potentially leading to a protracted legislative battle. The outcome will have lasting implications for Oregon's economy, its budget, and its future direction.