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Smart bombs: Love is a battlefield

Idaho Gov. Butch Otter’s cheeky love letter to Northwest businesses in the wake of voter-approved tax increases in Oregon and the proposed increases in Washington has caused a predictable dust-up. Washington Gov. Chris Gregoire fired back with some of the advantages in her own state.

Meanwhile, Phil Knight, owner of Nike, is loudly complaining about the tax hikes in Oregon, which has fueled speculation that he might lace up his sneaker company and dash off to Idaho.

Because Knight’s ire and Otter’s come-hither missive are focused on taxes, let’s take a look at the Tax Foundation numbers. The think tank produces an annual State Business Climate Index, which zeroes in on taxes. This is the stated rationale: “Taxes matter to business. Business taxes affect business decisions, job creation and retention, plant location, competitiveness, the transparency of the tax system, and the long-term health of a state’s economy.”

Of course, there are other factors that determine whether a state is business-friendly, but if owners were swayed by those they would’ve moved by now.

So what do we find in this year’s index?

Knight is right that the income tax hike on wealthier residents and businesses has hurt Oregon’s standing. Before the increase, Oregon had consistently ranked in the top 10 states for business tax climate. Now it’s ranked 14th. But before Knight runs into Otter’s waiting arms, he ought to consider that Idaho is ranked 18th. Lovers shouldn’t keep secrets like that.

Does this mean the sultan of swoosh should stay put? No, it means he’s looking for love in all the wrong places. If he’s after a top 10 state in the Northwest, there is a sole survivor. Washington ranks ninth.

Now that ranking could change, depending upon the tax package that Olympia passes. But it’s doubtful the state will sink to Idaho’s level.

The Ever Green State. Beyond taxes, there is one comparative number among Idaho, Oregon and Washington that might catch the eye of the Nike founder.

Idaho is a gem when it comes to low pay, and we know how Phil Knight likes that. Just ask his overseas factory workers.

Idaho’s per capita income was $36,492 in 2008. Oregon’s was $39,444. Both were below the national average of $44,254.

Washington’s, on the other hand, was $48,574.

Before Knight considers that a deal-breaker, I’d like to a make personal appeal to his self-interest.

Mr. Knight, you are a billionaire and the 52nd richest American (Forbes 2009). Washington is a state with no income tax. Grab a calculator.

Then just do it!

Gullible’s TRAVELS. The first time I got the phone message about covering up “the fact” that Congress had exempted itself from the provisions of the congressional health reform bills, I blew it off.

The second time it popped up, I knew I was onto an urban legend. It is similar to those pass-around e-mails that falsely claim that members of Congress don’t pay into Social Security and carries the same punch line: “If it’s so great, why doesn’t it apply to Congress?”, which ought to be required reading for the politically gullible, has the details. Congress is not exempt. It appears that this mistake began with a Wall Street Journal opinion piece last summer and has metastasized from there.

Here is the relevant passage from the Senate bill, which was added via an amendment by U.S. Sen. Charles Grassley, a Republican not shut out by the process (so many myths, so little time):

Notwithstanding any other provision of law, after the effective date of this subtitle, the only health plans that the Federal Government may make available to Members of Congress and congressional staff with respect to their service as a Member of Congress or congressional staff shall be health plans that are – (I) created under this Act (or an amendment made by this Act); or (II) offered through an Exchange established under this Act (or an amendment made by this Act).

And thus ends another episode of “Myth Busters.”

Smart Bombs is written by Associate Editor Gary Crooks and appears Sundays on the Opinion page. Crooks can be reached at or at (509) 459-5026.

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