Thread: An Oregon arrow maker suffers slings of outrage

An Oregon arrow maker suffers slings of outrage
by Amy Hsuan and Charles Pope, The Oregonian
Friday October 03, 2008, 8:50 PM
An Oregon company selling a 30-cent shaft for children's arrows became a bull's-eye for critics of congressional pork nationwide Friday, when lawmakers eliminated an arcane tax as part of their $700 billion bailout of Wall Street.

It is a tax, generating just $1 million a year nationwide, that few knew existed until the exemption provision gained attention on Web sites and national talk shows. The critics gathered force, and the tiny company based in southern Oregon's Myrtle Point found itself the surprising flash point for public venting against a bailout package with costs too vast for most citizens to grasp.


Rose City Archery
Talk-show hosts and callers vented against eliminating a tax on children's arrow shafts, such as these produced by Rose City Archery in Myrtle Point.

Rose City Archery owner Jerry Dishion found his company's name smeared across Web sites such as Dealbreaker and among lists of "sweeteners" circulated by Taxpayers for Common Sense, a watchdog group in Washington. The company makes an arrow shaft for kids learning archery, hardly the type of business that would conjure up images of a powerful lobby.

As of Friday, Dishion received more than 100 phone calls, 40 e-mails and hate mail from people across the country, not to mention phone calls from the BBC and mentions on the Bill O'Reilly talk show.

Dishion says the provision wasn't a tax break for his company as the critics have claimed. It was a tax repeal that corrected a mistake in the taxation of the little-known arrow industry.

"This is just righting a wrong," Dishion said. "We've been fielding all the phone calls and trying to explain what the situation is. Some of them get it. Some of them don't want to get it. They should be saying thank you."

Tax breaks big and small

What happened: Millions of taxpayers, thousands of businesses and groups as diverse as solar power developers and natural disaster victims will see tax relief with the House vote Friday to approve and send to the president a $700 billion financial rescue plan.
Among the beneficiaries: The tax relief package attached to the rescue bill promotes renewable energy development and extends dozens of tax breaks from the crucial research and development tax credit to breaks for narrowly focused groups.

Largest group: The largest group of beneficiaries in the tax portion of the financial rescue bill is about 20 million mainly upper-middle income taxpayers. Without congressional action, the Alternative Minimum Tax, which originally was supposed to affect only the very rich, would add about $2,000 this year to the tax bill of these people, most earning under $200,000 a year.

Smaller groups: There are also some four dozen small provisions. Among them, with projected costs over 10 years:

• Establishing a new tax credit ranging from $2,500 to $7,500 for purchasers of plug-in electric-drive vehicles. Cost: $758 million.

• Extending tax credits that expired at the end of 2007 for certain domestic corporations involved in American Samoa economic development. Cost: $33 million.

• Extending a credit of up to $10,000 for the training of mine rescue team members. The credit expires at the end of this year and the one-year extension costs $4 million.

• Enacting President Bush's proposal to erase the debt of the black lung disability trust fund at a cost of $1.3 billion.

• Extending for five years a program that reduces import duties on some wool fabrics. The tariff relief benefits U.S. worsted wool fabric producers that use imported fibers and yarns. Cost: $148 million.


The flap reveals the misinformation circulating about what the 43-cent tax repeal is really about, according to Jay McAninch, president of the Archery Trade Association. "It's amazing how complicated a little tax could be," McAninch said. "And how few people understand it. The fact of the matter is it's an important tax bill for a needed program. This isn't a pork barrel."

The tax became a problem for Rose City and a handful of other companies in 2004, when lawmakers, while trying to correct another problem with the arrow tax, changed a 12 percent tax on all arrows to a flat 43-cent tax on arrow shafts. The tax, which got tacked on to every arrow shaft, goes to fund educational programs put on by the U.S. Fish and Wildlife Service.

The change hit the youth archery market particularly hard, doubling the cost of arrows used by kids. That's the lowest-cost segment of the archery market and just a small part of the nation's $500 million archery industry.

Rose City Archery's wooden arrow shafts sell for 30 cents. The 43-cent tax took a huge toll on its youth archery business, Dishion said. The company also manufactures adult hunting arrows that retail for about $12.

In 2004, Dishion said, the company sold 1 million arrow shafts. This year, the company sold 100,000.

"When the price of the arrow doubled, the Boy Scouts, the summer camps, the school programs started canceling archery programs," Dishion said.

Oregon Sens. Ron Wyden and Gordon Smith worked for years to remove the excise tax from children's arrows.

Even so, aides to both senators said they did not lobby to have the arrow provision included in the financial rescue bill that President Bush signed into law. And regardless of the merits of Dishion's case, children's arrows and, by extension, his company have been thrust into the uncomfortable position as symbols of special interest greed.

David White, owner of Utah-based Cajun Archery, said the tax put many arrow makers out of business.

"We are not opposed to the excise tax, but it was never intended to tax a children's product of any kind," White said. "I feel disturbed that people thought we were getting our unfair share, but if the package is supposed to save jobs and jump-start Main Street, we're an example of that."

The wooden arrow provision was mentioned several times in a critical light on the House floor Friday prior to the vote. Rep. Steven LaTourette, R-Ohio, mentioned the arrows and another tax break for the makers of rum as reasons for his decision to vote against the package.

Still, LaTourette said, "I guess this means we'll be getting the pirate vote."

From there the anger and incredulous realization spread.

"Money for wooden arrows for children? I don't understand that," a caller to C-Span complained immediately after the vote.

Founded in Portland, relocates to southern Oregon
Started in 1932, Rose City Archery was originally founded in Portland, which gave the company its name. The company relocated to southern Oregon in the 1940s.

Dishion, an archer and writer for hunting magazines, bought the company 15 years ago, after visiting on assignment.

Dishion moved the company to Myrtle Point, nestled in the Coquille Valley. All the Port Orford cedar he needs to make arrow shafts lies within 15 miles of his shop. The new location reduced the cost of transporting wood, Dishion says.

"What this shows is that one person can affect legislation in this country," Dishion said. "Yay for America."

-- Amy Hsuan; amyhsuan@news.oregonian.com

http://www.oregonlive.com/news/index.ss ... ffers.html

• Establishing a new tax credit ranging from $2,500 to $7,500 for purchasers of plug-in electric-drive vehicles. Cost: $758 million.

And then do like some states have done, and tax for having an energy effecient car because it took away money they were counting on in their gas taxes. What the federal government cut, the State jumps in a taxes you twice what your "break" was.