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Why Wealth Is Good

Recently I was at a reception to meet the new Chair of the Department of Biomedical Engineering at the Knight Cancer Institute at the Oregon Health and Science University. This world-class cancer research center is supported by a $100 million grant from Phil Knight, the founder of Oregon-based Nike and likely the wealthiest person in the state. Mr. Knight has been a pillar in our society, a leading philanthropist and the entrepreneur behind an organization that employs over 30,000 people, mostly in well-paid positions. The Knight Cancer Institute employs about 500 researchers and scientists with potential to add many more over the years. In addition the center will purchase millions of dollars of state-of-the-art technical equipment, some made by Oregon-based companies. Over time the center could spawn start-up biotech companies and hopefully find a cure for cancer.

The next morning I read that a bill is being debated in the Oregon legislature to increase Oregon’s estate tax to be the second highest in the nation and would tax estates valued at $1 million compared to the Federal estate tax that starts at $5 million. This would be on top of Oregon’s highest in the nation income and capital gains tax rates. I started to think what would happen if the Phil Knights of the world decided not to live in Oregon due to its high taxes, and how many jobs would not be created and how much worse off we would be without the charitable giving from wealthy entrepreneurs? Often a person opts to make contributions to institutions where they have a connection. If Oregon were to drive these people to other states I doubt we would have the Phil Knight Cancer Institute located in Portland.

Our legislators need to understand that wealth creation drives a large part of our society, to embrace it as a good outcome of a capitalistic system and to understand that states do in fact compete with each other to attract business. We should also all thank Phil Knight for his continued contributions to Oregon in spite of our tax policy that drives so many like him from our beautiful state.

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