If you’ve been on social media lately, you may have seen a post saying Oregon is “quietly working on one of the largest tax increases in state history.” It lists a 10.1% healthcare income tax, a 9.6% employer payroll tax, and higher corporate, Corporate Activity Tax (CAT), and lodging taxes to fund a single-payer healthcare system.
Clients have been asking us about it, so we went to the source documents.
Short version: the numbers are real, but the post leaves out context that matters a lot if you’re trying to figure out what this means for your household or your business.
Where the Numbers Come From
In 2023 the Oregon Legislature created the Universal Health Plan Governance Board through Senate Bill 1089 and asked it to design a plan to finance and run a universal health plan for Oregon residents (UHPGB). The table in the post comes straight from the board’s own materials. The Finance and Revenue Committee’s March 3, 2026 revenue proposal estimates how much each tax would raise, measured against a $16.9 billion “revenue replacement target” in 2022 dollars:
Revenue source Current Oregon rate Proposed addition Estimated revenue (2022 $)
Corporate income tax 6.6%–7.6% +3.0% $639 million
Corporate Activity Tax 0.57% +0.10% $215 million
Employer payroll tax 0.9%–5.8% 9.6% $8.7 billion
Healthcare personal income tax 4.75%–9.9% 10.1% $7.3 billion
Lodging tax 1.5% +0.2% $5 million
So the post is right about the rates, and right that the health income tax would apply to income above 200% of the federal poverty level.
What the Post Leaves Out
It’s a draft, not a law None of this has been enacted. The board’s latest summary is labeled “Draft Revenue Proposal Summary V4” (June 18, 2026). It says the table is “illustrative only” and that the dollar amounts and percentages are expected to change.
In August, the board voted unanimously to push its report deadline from September 15 to December 1 because it still isn’t sure how to pay for the plan. One board member called the work so far “some sort of an interim report,” not a full plan (Oregon Capital Chronicle). After that, lawmakers could take it up in the 2027 session or refer it to voters as a 2028 ballot measure (KFF Health News).
It isn’t really “quiet” The board’s meetings are public, and its proposals, consultant reports, and even a minority report criticizing the financing are posted on oregon.gov. That said, most Oregonians probably haven’t been following along, so it’s a good thing people are paying attention now.
The taxes are meant to replace what you already pay for health care
This is the biggest gap in the post. The proposal is built on the idea that Oregon already spends this money on health care through employer premiums, employee premiums, marketplace plans, and out-of-pocket costs. The plan would redirect that spending into one public fund (UHPGB revenue proposal).
· The employer payroll tax is meant to replace the employer’s share of health insurance premiums.
· The healthcare income tax is meant to replace employee premium shares, ACA marketplace premiums, and household out-of-pocket costs. · The benefits as proposed would have no premiums, deductibles, or copays (KFF Health News).
As a gross number, the new taxes would be very large. Whether it’s a net increase for you depends on what you pay for health care today.
Small employers and wage earners get some relief
The 9.6% payroll tax would only apply to payroll above a $500,000 firmwide threshold. Employees would also get a non-refundable credit against their healthcare income tax equal to 50% of the payroll tax their employer paid on their wages, so the same wages aren’t fully taxed twice (UHPGB draft summary).
The numbers are already moving
The newest draft drops one revenue tool and has the plan pay all required Medicare Part B premiums, which adds an estimated $1.05 billion to the revenue target. The lodging tax piece hadn’t been officially adopted by the board as of June (UHPGB draft summary). Later modeling looks at a progressive income tax that tops out around 14% of income, plus a funding gap of $30 billion to $35.5 billion a year once the plan is fully running in 2032 (Oregon Capital Chronicle).
Who Might Pay More, and Who Might Pay Less
The board ran example scenarios comparing what households pay now with what they might pay under the plan, in 2026 dollars (UHPGB scenario comparison). The employer examples assume a company with at least $5 million in payroll.
Household Pays today Under the plan
Single employee, $55,000 wages $3,353 $0
Single employee, $150,000 wages $3,627 $5,446
Family of four, $105,000 wages $10,607 $890
Family of four, $250,000 wages $11,702 $11,759
Self-employed individual (age 30), $75,000 $11,300 $4,351
Self-employed individual (age 30), $150,000 $11,300 $11,926
The pattern is pretty clear. Lower and middle-income households, and self-employed people buying marketplace coverage, would generally pay less. Higher earners would break even or pay more. KFF estimates 31% to 60% of Oregonians would pay nothing for their health benefits (KFF Health News).
There are serious open questions too. The minority report argues the model overstates revenue and understates costs. Board members have also asked out loud whether the plan saves money overall (Oregon Capital Chronicle). It’s also unclear whether the federal government would let Oregon redirect Medicare and Medicaid dollars into the plan (KFF Health News).
So, Is the Post Correct?
Partly. Here’s our take:
· Accurate: The tax rates, revenue estimates, the 200% of poverty level threshold, and the goal of replacing premiums and out-of-pocket costs all match the board’s documents.
· Misleading: “Quietly working on” makes it sound like this is happening soon and out of public view. It’s an early draft, the board itself says it isn’t finished, and nothing happens without the Legislature or voters.
· Missing: The $500,000 payroll threshold, the 50% employee credit, the fact that these taxes are meant to replace current health care spending, and the fact that the numbers are still changing.
What We’d Suggest Now
You don’t need to change anything about your tax planning yet. If you own a business or have a higher income, though, it’s worth keeping an eye on this:
· Business owners: Know what you spend per employee on health benefits today, including the employer premium share and admin costs. That’s the number to compare against a 9.6% payroll tax on payroll above $500,000.
· Higher earners and self-employed clients: Look at your total health care costs, not just premiums. Deductibles, copays, and marketplace premiums all count in a fair comparison.
· Everyone: Watch for the board’s report due December 1 and the 2027 legislative session. That’s when we’ll learn whether there’s a real proposal and what the final rates look like.
We’ll keep watching and share updates as things develop. If you want to talk through what this could mean for your situation, reach out to your CPA.
This post is for general information only and isn’t tax or legal advice. The proposal discussed here is a draft and subject to change.
