Create sales tax and reduce income taxes?

The Legislature will soon consider a tax reform plan (HB 2530) that would implement a 5-cent sales tax, cut Oregon's mostly-flat income tax from 9% to 6%, reduce capital gains taxes, and trim the estate tax.

The plan is sponsored by a few key Senators and some House Republicans: Senator Kurt Schrader (D-Canby), a co-chairman of Ways & Means; Senator Ryan Deckert (D-Beaverton), the chairman of Finance & Revenue; plus Senators Ben Westlund (D-Tumalo) and Frank Morse (R-Albany). On the House side, sponsors include Representatives Bob Jenson (R-Pendleton), Sal Esquivel (R-Medford), Scott Bruun (R-West Linn), Chuck Burley (R-Bend), and Vicki Berger (R-Salem.)

Those five Republican Representatives are critical to passage. From the AP:

This version of tax reform comes with five House Republican sponsors, though the party has had a reputation as being generally anti-tax. Any revenue-related bill needs 36 votes to pass out of the House, and there are 31 Democrats in the 60-member chamber.

From the Oregonian:

Jenson said the idea could have momentum in this legislative session. Last fall, he noted, Oregonians voted against ballot measures to limit state spending and to put new tax cuts in place, suggesting that perhaps there's been a change in voter attitudes. And legislators aren't preoccupied this session with trying to patch holes in a budget suffering from an income tax collection decline, he said, giving them space for a review of the current system. "We need a unified effort as far as the Legislature is concerned," Jenson said. "Do we have that now? I'm not sure, but we can get pretty close."

Governor Kulongoski's reaction?

Gov. Ted Kulongoski has said that he would support a consumption tax, as long as it was part of a broader package on tax reform. On Wednesday, a spokeswoman said Kulongoski's focus in the current legislative session would be on narrower issues: raising the minimum tax paid by corporations, and suspending the corporate kicker -- the money returned to businesses when state revenues exceed forecasts by 2 percent or more.

What would be the revenue impact?

Taxpayers in every income range could expect to pay less in taxes, except some taxpayers who earn too little to owe income taxes. For most Oregonians, sales tax payments would be more than offset by reductions in income and property taxes, Westlund says.

It would raise more money -- an estimated $800 million for every two-year state budget -- to spend on education, infrastructure, health and safety, Westlund says. The extra money would come primarily from sales taxes paid by people such as tourists who don't pay much or any of Oregon's income tax.

Discuss.

  • (Show?)

    It's interesting that it's sponsored by five of the more moderate House Republicans, a moderate Senate Republican, and three of the most moderate Senate Democrats.

    Despite the progressive takeover in the House and the strong progressive majority in the Senate, this is a plan being led from the middle...

    Given the 2/3 vote required, is that where tax reform has to start? Or should we be expecting more progressive reform from the new majority in the House?

    I'm not sure about this one. Will have to dig in and think about it.

  • TomCat (unverified)
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    I have reservations about adding a new kind of tax. Even if it were truly revenue neutral, adding a percent to the sales tax later is much smaller step than starting one up. If a single sales tax were to replace the income tax, with exemptions for food and medical care, I'd be more inclined to support it.

  • brett (unverified)
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    No no no! This is not why we voted blue. The problem with Oregon's income tax is that it's regressive, topping out at much too low a level. I seem to recall reading that we could end our budget woes if we just restored the pre-Republican-controlled-Legislature balance between taxes paid by businesses and taxes paid by individuals.

    Rather than impose a regressive sales tax, why not make businesses pay their fair share, and increase the top income tax rate for the millionaires, giving us a truly progressive income tax?

  • Bert S. (unverified)
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    Brett's got it right.

    Why do we want to make the system even MORE regressive?

    There are better ways to capture tourism dollars if that is the goal.

  • Steve Bucknum (unverified)
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    I have always thought that a sales tax would bring revenue in from all the tourists, which is not a bad thing.

    Does a sales tax have to be "flat" all year? Could it be variable, being lower in the winter and higher in the summer to get more tourist dollars? If I knew that our sales tax would be 4% October to April and 6% May to September, I would buy my cars, washing machines, etc. in the winter - as would most Oregonians.

    The one concern I have with this approach, which could be fixed, is that it still doesn't bring taxation equity to corporations. They are not paying their fair share, and a sales tax doesn't deal with that.

  • bad a math (unverified)
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    "a 5-cent sales tax"? is that supposed to be a 5 percent sales tax?

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    The problem with Oregon's income tax is that it's regressive...

    Hey, but this fixes that by LOWERING the capital gains tax, right? While we impose a sales tax.

    I've got that right...right?

  • Gregory (unverified)
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    What part of No Sales Tax in oregon doesn't Salem Understand? 9 times it has been shot down, 9 times! I would like to see a law that the next state person to suggest that be taken straight to prison, to serve out thier term in office in jail. Do not mess with the will of the oregon voter!

  • (Show?)

    "a 5-cent sales tax"? is that supposed to be a 5 percent sales tax?

    it's the same thing--you pay five cents on the dollar (roughly).

    And it's a terrible idea.

  • Thomas Ware (unverified)
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    Don't get me wrong, out here Homeless on the High Desert we are a bg fan of Ben Westlund, but five of the more moderate House Republicans, a moderate Senate Republican, and three of the most moderate Senate Democrats. doesn't say much for a so-called progressive takeover.

  • TR (unverified)
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    Obviously the sales tax trolls are alive and well again in Salem trolling for more dollars from the general public. When is enough enough? When are these sales tax trolls going to stop wasting the public’s time and money by not bringing it up again and again in the legislature? When is state government going to live within its means? The voters have rejected the same old regurgitated plan many times over. These sales tax trolls are assumed to be public servants of the voters, not adversaries. There was a time in Oregon when big business and corporations paid a near 50 percent of the revenue collected by the state. The current big business and corporate share is a pitiful five to six percent of the revenue collected. Continual tax give-a-ways to big business such as property tax abatements to fat cat developers, promoting non-efficient energy like ethanol, and dumping money into alternative transportations systems that are not financially self-sustainable requiring continual operating tax subsidies are but a few of the examples of what actually needs fixing

    Small businesses are the backbone of the Oregon economy. The insanity is that small businesses located near the State of Washington border such as in Hood River and The Dalles will be some of those most hurt by an Oregon sales tax. Many small businesses such as those on Hayden Island in Portland are already struggling to survive and will probably have to close their doors. Allowing the lunacy of the sales tax trolls to receive their way will have many people seeing red instead of blue. Don’t cook Oregon’s books over the fire of the sales tax trolls. Balance those books by increasing and balancing the percentage of revenue collected from big business and corporations with that of small businesses, individuals and families.

  • (Show?)

    Count me as a skeptic on this one too. This is just another tax shift from the rich to the working class and poor. No wonder it's supported by "moderates" (also known as traditional conservatives) of both parties.

    While I agree that in theory a consumption tax is better because it encourages saving, you can't use that to lower the tax rates of people (like myself) who are already living on easy street. For this to work, you need to replace one regressive tax with another.

    So how about this? The State of Oregon institutes a "Carbon Tax" - largely levied on fuels - and uses the money to eliminate the State portion of the Employment Tax. It also forces all corporations to increase compensation of its employees by the exact amount that the employment tax goes down.

    What would this mean practically? As employment taxes go away, everyone's paychecks would go up by $20 to $200 a week. Gas would be $3.50 a gallon. If you wanted to keep more of your own money, you'd ride a bike to work. If you wanted everything to even out, you'd use a regular car. And if you enjoyed owning a gas guzzling SUV, you'd end up paying for it. Your choice of lifestyle.

    And Oregon would, once again, be leading the nation in terms of policy.

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    Tourists do pay income taxes indirectly. If an out-of-state tourist buys something from an Oregon retailer it's taxed as part of the retailer's income.

    There are a lot more Oregonians than tourists buying things from Oregonians. The idea that there's some magic revenue stream to be tapped from tourists is just so stupid. Does anyone here think: "Well, if I'm going to Seattle I'm going to need to take X dollars more because of the sales tax?" No, you spend what you can afford to spend, and the sales tax is going to be offset by loss in revenue to retailers, which might mean more money for the state but why not just raise the income tax rates instead?

    And look at the line "Taxpayers in every income range could expect to pay less in taxes, except some taxpayers who earn too little to owe income taxes." Doesn't that mean that the people who are too poor to pay income tax are going to pay more than they are now? Isn't that just an acknowledgment that this shifts more of the tax burden to the poor?

  • (Show?)

    First of all, I gotta ask: who does the governor think he's fooling by calling it a "consumption tax?"

    A little more from the bill itself: it would not only cut income taxes, but also inheritance taxes, a sop to the GOP and maybe the reason they're behind it.

    Apparently the sales tax is broad-based, with no provision for exempting food or other necessities. To me this is pretty much a deal-killer, particularly given that the sales taxes can't be offset for very low income citizens by other tax breaks. It's an unneccessarily regressive provision. ("Tangible personal property" will be taxed, which "personal property that can be seen, weighed, measured, felt or touched, that is in any other manner perceptible to the senses or that is electricity, water, gas, steam or prewritten computer software.")

    I consider this a promising development, however. Maybe it means the time for serious change to the tax structure is at hand.

  • JHL (unverified)
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    Jeff, you're right... this is promising. But read the bill before making assertions.

    Start at Section 95 and read down the list of all the things exempted under the proposed sales tax.

    On a more general level, I love the uber-liberals who: 1) Want a super-progressive tax system. 2) Object to cutting service levels in lean times.

    Pick one or the other, dude. Even if businesses get taxed up the wazoo, it's still a volatile income-based tax... which is just not stable.

    Darrell - I assume that in 2002 when people were dying because they were being kicked off of OHP due to the budget shortfall... were you fine with that because at least they were paying a progressive tax?

  • Jon (unverified)
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    Taxpayers in every income range could expect to pay less in taxes

    Ok, I thought the big complaint of late is that there isnt enough money to fund everything the state needs to pay for. How does this help things?

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    That whole "tangible personal property" thing is interesting... it basically exempts from sales tax the intangibles - legal advice, consulting, tax preparation (!), housecleaning, day care, and the myriad other personal services people provide.

    I'm starting to tilt against....

  • (Show?)

    I like this proposal.

    If you start with the assumption that since any tax reform will require a 3/5 vote in both chambers of the legislature and therefore significant Republican support, meaning no tax reform with any chance of passage could be an ideologically pure left wing wet dream, then this proposal sounds great.

    Let's list out the pros and cons:

    Pro:

    1) It generates more revenue while lowering the tax burden on most Oregonians by generating revenue from tourists and the "underground" economy.

    2) More revenue means more stable funding for education, health care, child care, environmental protection, etc.

    3) Fewer low income Oregonians will have to pay income taxes.

    4) More revenue means more funding for programs aimed at helping the poor and homeless.

    5) The sales tax will exempt life necessities like medication, groceries, rent, and basic clothing, minimizing impact on the poor.

    6) The sales tax is not regressive. It's a flat tax with exemptions aimed at helping the poor, so technically it is slightly progressive. A regressive tax, by definition, would be a tax where the tax rate is higher on the poor than on the rich. An example would be Social Security tax that applies to everyone who makes around $90k or less but not to income above that threshold. Lack of progressivity does not necessarily equal regressivity.

    7) By not soaking businesses and the rich, the proposal makes sure that Oregon remains a business friendly place and people have jobs, while also making it more likely that the proposal will attract Republican support and actually have a chance of becoming reality.

    Con:

    1) Some very poor Oregonians might end up paying some sales tax where now they don't have to pay any income taxes or a sales tax. However, this is likely to be overwhelmed by increased support through programs aimed at helping the poor.

    2) The proposal doesn't hit the rich as much as many Democrats might want.

    3) The proposal doesn't include a Carbon Tax, which would encourage renewable energy, energy efficiency, and alternative fuels while reducing CO2 emmissions and combating global warming.

    4) The proposal doesn't cure cancer, AIDS, ebola, bird flu, or any other disease, and doesn't ensusre universal health care for all Oregonians.

    5) The proposal is a compromise proposal rather than some ideal proposal progressive and left wing activists might dream up, which would make everyone feel better but ensure that it never passes.

    So after weighing the pros and cons, I think this is a great proposal and I hope it passes.

  • JHL (unverified)
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    Jon, that's like saying that if you replace one old light bulb with two energy-efficient bulbs, you're necessarily using more energy.

    Senator Westlund's got a pretty good breakdown on his website of how a plan like this would work, but I can't tell whether this is the current bill or what he was proposing during his campaign, though the plans seem very similar.

    You increase the tax base, and you can bring more money in and lower costs for everyone involved. (It's the same principle as Measure 44.)

  • JHL (unverified)
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    Good points, Adam! (especially Con #4!)

    Kari, the reason that intangible services aren't taxed?

    Do you want Mandate Media to have to start charging sales tax on web design services? One price for in-state, another for out-of-state sites? It's likely that you could afford the set-up and administration, but what about some high school kid who's designing a website for some extra cash? Should he/she have to charge sales tax?

    What about that same kid mowing their neighbor's lawn? "All right, Mr. Peterson... that'll be $5 plus an extra 5% comes to $5.25. I'll just cut a check to the Department of Revenue for twenty-five cents and we'll be all squared away."

  • (Show?)

    Adam wrote... By not soaking businesses and the rich

    Here's the thing. It seems that we always evaluate every proposal as if the current system is almost-perfect, and the new is designed to get us to perfect.

    But our current system isn't almost-perfect. It's not even close. Oregon is now #50 in the nation in corporate taxes. Our tax system today heavily favors the wealthy.

    Why not "soak" the rich and "soak" businesses? They've been "soaking" us for years!

    I'm much more interested in defining first what would be the 'perfect' system (as each of us would individually define it) and then working our way toward that.

    In my world, the tax burden would be shared equally by individuals and businesses. Wealthier folks would pay a higher share of their income than middle-class folks, and they'd pay the same rate on earned income and unearned income (both stock market gains and inheritances.)

    Compared to where we are now, that means equalizing capital gains taxes with income taxes, it probably means boosting the estate tax (with a big exemption), and boosting property and income taxes on corporations.

    My goal is to get back to balance, not expect any new tax proposal to be itself balanced. Our current system is imbalanced. Any proposal that maintains that imbalance isn't an improvement.

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    p.s. On the above, I am DEFINITELY speaking only for myself and not any of my friends, neighbors, fellow bloggers, or clients. And it's a seat-of-the-pants thought, so I've probably screwed something up - or made a claim I'll later regret.

  • andrew (unverified)
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    I'm a little surprised at the amount of knee-jerk anti-sales tax response still out there. Most of the world has figured out that stable governments need multiple revenue sources. The three primary areas are income, property and sales tax. Its often referred to as a three legged-stool. Remove one and the system is out of whack. In Oregon, after proportional property tax increases have been legislative away by some sizemore-based initiative in the early 90s, we've had a one-legged stool. When the economy is booming like the early 90s, things are very good. But when the economy tanks like the late 90s/early 2000s, things are very, very bad.

    Moreover, our income-tax based only tax system leads to pyschological harm and confusion. Oregon's overall tax revenue is among the lower half of the nation, but we all feel like its such a high burden because our personal income tax is the highest in the nation. Put another way, you notice $50 missing in your paycheck far more than an extra nickel for your beer.

    We need a stable muli-source tax revenue system in Oregon. Like global warming, no reputable economist (even progressive liberal ones) would dispute that some form of sales tax should be a part of that system. Of course, many people debate on the type of sales tax. But I think this proposal is an exciting first step toward something that can help establish a more rationale stable revenue system.

    As for the argument that Oregon always votes down sales, I can't help but add that this is an irrelevant Karl Rove-esque soundbite point. The last popular vote on a sales tax was 14 years ago. At that point in time people preferred cassette tapes to the new CD technology. People then thought George W Bush's father was conservative. Most people barely heard of sexual harassment and gay marriage was not even something people imagined on an acid trip. And most importantly almost half the people living in Oregon today, didn't leave here then. The simple point is times change and so do people's view on things. (consider congresses position on the iraq war). Simply saying its never been the case is a nice historical fact. But it doesn't mean adding a sales tax component to our revenue system is not long overdue.

  • (Show?)

    Comprehensive tax reform is badly needed in Oregon. I think that HR2530 is a very good move in the right direction.

    I looked at this proposal by working from these principles:

    Have a fair and simple tax system that doesn't unduly burden the working class to the profit of those who have already made the most money from our system. The responsibility to pay taxes should be shared equitably with those having gotten the most from the system paying the most back into the system to increase opportunity for the next generation.

    Taxes must encourage work & saving and must support families and the communities they live in — reward work, not existing wealth.

    Taxes must be sufficient to pay for desired services for the common good, either by agreeing to reduce current benefits or by increasing taxes.

    Taxes should be levied fairly across economic sectors of society, reflecting the broad base of benefits across the sectors.

    Make civic investments when times are good, provide greater support when times are bad.

    Oregon’s state tax system has three major problems: (1) the budget and revenue forecasts have a high error rate, (2) the amounts collected are highly volatile to economic conditions, dropping precipitously in economic downturns when services needs increase and growing excessively when times are good, and (3) taxes are almost exclusively provided by taxing individual personal income of working families.

    #1 -- Reduce the error rate is already being addressed by: requiring annual legislative budget sessions so forecasts of taxes and service needs are made for each year — not 2 years apart as currently— so both the expense and revenue estimates are more accurate.

    # 2 -- Reduce tax revenue volatility is the primary issue being addressed with HR2530 by broadening the tax base by adding a consumption tax, with “essentials” exempted to reduce impact on lower income Oregonians.

    This is not sufficient howeve. We should also broaden the tax base by repealing the “corporate kicker” or redirecting it into a rainy day fund. Furthermore we need to smooth out unanticipated revenue shortfalls by funding a “rainy day” account of 10 - 15% of annual expenses so that shortfalls don’t require drastic cuts in services just when those services are most needed in an economic downturn. Current proposals are helpful, but seem inadequate in size.

    #3 -- Increase tax fairness is addressed by: (a) the cut in capital gains, if I understand it as proposed, would simply bring the capital gains rate in line with income tax rate, which seems appropriate -- work (income) shouldn’t be taxed at a higher than wealth (capital gains) (b) raising the inheritance tax threashold to enable small family farms and other small businesses to continue within the family, but what level is “right” for this is hard to pin down.

    I could imagine also implementing a progressive estate tax on inherited wealth as a way to make that phase in work better

    But the last thing is to ensure that taxes are levied fairly across economic sectors of society, reflecting the broad base of benefits across the sectors. This means ensuring that big corporations pay their fair share such as raising the minimum corporate tax and raising the tax rate for the most profitable corporations.

    As the tax base is broadened, it is important that personal income taxes be reduced taking account of all changes to the tax system and that the net result needs to produce enough to also fund any concurrent new civic investments. HR2530 seems work in that direction.

  • Bert S. (unverified)
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    Does anyone have studies/links showing that the sales tax is super stable? I'd guess that consumption would down in recession as income decreases.

    If you want stability, the better thing to do is create a kick-ass rainy day fund. More progressivity could be built into this approach than with a sales tax. In addition, a good rainy day fund would have the right fiscal effects. We could tax less in recession, and tax more in good times.

    The whole kicker thing puts a straight jacket on the state. We could resolve this issue by creating really strict laws to govern surpluses and the use of the rainy day fund.

    JHL said ... On a more general level, I love the uber-liberals who: 1) Want a super-progressive tax system. 2) Object to cutting service levels in lean times.

    Pick one or the other, dude.

    That would take care of that dilemna.

  • Urban Planning Overlord (unverified)
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    Although it is "moderates" apparently pushing this bill, I always have to laugh when "progressives" try to impose a sales tax.

    Adam, a sales tax is regressive. Let's say the average person earning $20,000 per year spends $8,000 per year on items subject to a 5% sales tax. His $400 payment is 2% of his income.

    Now the average person making $100,000 spends $20,000 per year on items subject to a 5% sales tax. His $1000 payment is 1% of his income.

    The person with the lower income pays a higher pecentage of that income in tax. THAT is the definition of a regressive tax.

    And Oregon is one of the few states in the nation that recognize this. We're already PREOGRESSIVE. Why change that?

    As for the old "two-legged stool" problem, sales tax revenues dip and rise with economic prospects just like income taxes do. California had a massive budget problem earlier this decade just like Oregon did, and they have a hefty sales tax along with their income tax.

    Now, if you want to make Oregon's income tax fairer and more progressive, I'm all for that. If you want to reform the kicker so that Oregon can accumulate a "rainy day" fund to ride out the economic dips, I'm all for that.

    But sales tax? Count me out. For the Tenth Time.

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    Whoever said a sales tax isn't regressive because the rate is flat, isn't really grasping what regressive means. It means that poor people are locked into paying a higher percentage of their income on sales taxes than rich people. If I make $1000 and pay $100 of it in sales tax, I'm down to $900. If I make $100,000 and pay $100 in sales tax for the very same items...I'm still at $100,000 for all intents and purposes. There is a regressive impact at the lower end of the scale.

    It simply makes no sense to correct an imbalanced tax system by placing a tax equally upon both ends. The problem in Oregon is fundamentally NOT that people under the $10,000 margin are paying too little in tax; it's that Nike and Greg Goodman are paying too little.

    When wage earners bear no more than half of the tax burden compared to equivalent wealth earners, and corporations bear at LEAST half compared to other "individuals," then we can start tweaking. But this plan is 100% backwards: it REDUCES taxes disproportionately on people with higher incomes, wealth income and corporate income--and INCREASES taxes on people with lower incomes. Raise the corporate minimum, get rid of BOTH kickers (or means-test their return), and start taxing vehicles like nearly every other state does.

  • Urban Planning Overlord (unverified)
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    I also noticed that TR couldn't help libeling mass transit, by claiming that we are:

    dumping money into alternative transportations systems that are not financially self-sustainable requiring continual operating tax subsidies
    Guess what, TR? Non-alternative transportation systems, such as your beloved free roads, and definitely no financially self-sustaining, and require continual operating subsidies, in terms of maintenance, policing, etc. So unless you are proposing complete pay-for-themselves toll roads, you are doing nothing more than exchanging one subsidy for another.

    www.urbanplanningoverlord.blogspot.com

  • Damon Kaswell (unverified)
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    No, and no, and no again! This is not progressive. This is the opposite of progressive. Sales taxes, by their very nature, are regressive.

    That doesn't mean they're always a bad thing, as long as the point isn't to raise general funds. Cigarette taxes, for instance, are good for paying the health costs generated by smoking in the first place, as well as acting as a deterrent for smoking.

    But a general sales tax? No! That will force more low- and zero-income people to pay taxes they can't afford and don't currently pay! Look, five cents on the dollar isn't much for me, but for a guy who only makes $8,000 a year, every single penny counts.

    The answer, and the reason we voted progressive, is to tax wealth at progressively higher levels. The more you own, the more -- and the larger percentage of your income -- you can afford to part with to pay for the services everyone uses.

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    Kari: "My goal is to get back to balance, not expect any new tax proposal to be itself balanced. Our current system is imbalanced. Any proposal that maintains that imbalance isn't an improvement.

    That may be your top priority for any tax reform proposal, but the authors of this proposal are putting reducing revenue volatility, reducing the revenue projection error rate, and increasing overall revenue as higher priorities than equalizing the tax rates between individuals and businesses basically for aesthetic and sense of fairness reasons. Not that I'm against that, I totally agree that corporations should pay a lot more than they do and Oregon should not be #50 in business taxes. But personally I don't rank shifting this balance as the top priority in any tax reform proposal. I rank the other priorities mentioned above higher.

    UPO:

    Let's say the average person earning $20,000 per year spends $8,000 per year on items subject to a 5% sales tax. His $400 payment is 2% of his income.

    Now the average person making $100,000 spends $20,000 per year on items subject to a 5% sales tax. His $1000 payment is 1% of his income.

    I think it's interesting that you assumed a person making $20k per year would spend about 40% of their income on items subject to sales tax, while a person making $100k would only spend 20% of their income on items subject to sales tax. If you changed your calculations to equalize this, and had the rich person spend 40% of their income on items subject to sales tax, then each person would end up paying 2% in sales tax.

    Torridjoe:

    If I make $1000 and pay $100 of it in sales tax, I'm down to $900. If I make $100,000 and pay $100 in sales tax for the very same items...I'm still at $100,000 for all intents and purposes.

    Same thing here. If I made $100k per year, I can assure you I would spend a lot more than only $100 on items subject to sales tax. Rich people spend a lot more money and probably a bigger percentage of their income on consumer goods subject to sales tax than poor people do.

    It would be interesting to see any actual studies on this issue.

  • jessibeaucoup (unverified)
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    I'd also like to point out that those at the lower income levels currently are not subject to state income tax. BUT, they'd have to pay a sales tax were it enacted - leaving our most vulnerable with less. Does that make sense to anyone?

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    "I'd also like to point out that those at the lower income levels currently are not subject to state income tax. BUT, they'd have to pay a sales tax were it enacted - leaving our most vulnerable with less. Does that make sense to anyone?

    It doesn't necessarily follow that these poor people would be left with less. Since we would have more and less volitale revenue, we would be able to spend more on programs to help these people. If we wanted to, we could even send them an annual rebate check for the average amount people at these income levels are likely to spend on sales tax.

    You can make this same argument about the sales tax hitting the poor harder when talking about cigarette taxes. They tend to smoke more, so they pay more in cigarette taxes. Poor people spend more on the lottery too. So I guess you would be in favor of getting rid of the lottery and all cigarette taxes?

  • wharf rat (unverified)
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    Hi folks...

    Count this low/middle income worker as a supporter.if this was only about the integrity of the tax system. I support my family on $33,000/yr. My discretionary spending is pretty limited once the rent, groceries and meds are purchased, maybe 2500-3000 a year for work clothes, safety boots, a pair of jeans, the NYT subscription. At 5% that would be about $150 for sales tax. Compared to my Oregon income tax that's a bargain.

    Unfortunately, this issue is also about trust. I live in Oregon's armpit of incompetence...Jackson County, where we can't keep libraries open, roads cleared, public safety enforced or parks clean. My cynic meter is running off the scale right now so it's hard to believe that the leg would come up with a plan that actually had measurable benefit to folks in circumstances similar to mine.

    Thanks

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    Kari, you might want to check your data. According to the Tax Foundation, Oregon ranks 30th in corporate taxes, not 50th (see http://www.taxfoundation.org/taxdata/show/281.html)

    I know, I know. Facts are such inconvenient things.

  • Mike Smith (unverified)
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    The expected savings posted on Westlund's site (Ben Westlund, linked earlier) reinforce the idea that it's a regressive change in taxes. I'm not sure about the state of current effective taxes on income/wealth, but Ben Westlund's site projects that savings at particular income levels would be:

    Income - Savings - Ratio of savings/income(in thousands) 35k - $133 - 3.8 45k - $170 - 3.78 55k - $269 - 4.89 75k - $473 - 6.31 125k - $700 - 5.6

    For a flat change in tax, all those ratios would be equal (meaning the change in tax as a percentage of income would be the same at all income levels). This isn't a perfectly regressive change, but the income levels below 55k aren't receiving as large a savings in proportion to their income as the income levels at 55k and above.

    Note: To clarify, the ratios given above are the percentage of income that their taxes will be reduced by (multiplied by 1000 to avoid small numbers, since the changes are pretty small). Larger numbers means their taxes will be reduced by a larger percentage of their income.

  • Mike Smith (unverified)
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    The exemptions can certainly be geared towards only taxing luxury items, which is a necessity for a sales tax. On the other hand, someone making 35k/yr wouldn't necessarily spend more on a dishwasher, television, computer, etc. If they're fiscally smart, they'd just save the rest of the money, which is where low-income families have the hardest time. The frivolous spenders (of which low and high income workers can be guilty) will get hit hard, and the most obvious of these are the extremely wealthy celebrities; despite the impact of a sales tax, I do think it has some benefits in reducing some of the consumer waste in our country.

  • TR (unverified)
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    A couple of additional points:

    Steven Maurer wrote “If you wanted to keep more of your own money, you'd ride a bike to work.”

    If the tax trolls in Salem truely wanted to bring equity into the tax system instead of just advancing a socialistic agenda, bicyclists would be directly taxed for their use of the road instead of relying on subsidies from other resources to pay for bicycle infrastructure.

    Secondly, does anybody really think this or any other sales tax would remain at five percent? Every money grabbing legislature and governor that would follow its initial start up would be scrambling for ways to increase it. Additionally, every city, town and county in Oregon along with Metro would want to jump on the band wagon and add on a sales tax of their own. Soon Oregonians would be paying as much as Washingtonians in sales taxes, but still have the Oregon personal income tax to deal with. Big business and corporations in Washington pay far more in taxes than they do in Oregon. This as with other sales tax proposals appears to be like yet another way for political forces to dig deeper in the pockets of Oregonians so those forces can exercise more socialistic controls over the daily lives of citizens. To any sales tax proposal just say; “NO thanks, I am both and American and an Oregonian.” (Take your socialistic controls and go elsewhere)

  • Bert S. (unverified)
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    Some one said above to someone else :

    So I guess you would be in favor of getting rid of the lottery and all cigarette taxes?

    Lottery: Yes, by all means get rid of it. In this case, the State preys on people's addictions. Talk about regressive! If we had a more progressive tax system at the state and federal levels we'd have no need for the lottery.

    Cigs: Keep the taxes. Cigarettes suck. Their main purpose is to make stockholders of tobacco companies, convenience stores etc. rich. I've seen lung cancer and heart disease up close, and let me tell you the health effects are horrific. Yes their are adverse income effects. If their needs to be a correction for the poor, do it though income support and/or health care allowances.

  • djk (unverified)
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    Most of the world has figured out that stable governments need multiple revenue sources. The three primary areas are income, property and sales tax. Its often referred to as a three legged-stool.

    I agree. Let's go for a three-legged stool. Individual income tax, property tax, and a gross-receipts tax (modelled after Washington's Business and Occupations tax). A flat B&O tax could have negative impacts on struggling small businesses, so exempt, say, the first $20,000 in gross receipts. Or the first $50,000. Design the B&O tax to feed a stability fund in good years, and to generate enough revenue to support a healthy K-16 public education system.

    Why cut the nearly-flat-rate income tax? Why not raise the top rate to 10%, but put in meaningful, annually-indexed brackets? We can offer most Oregonians a significant tax cut.

    I have always thought that a sales tax would bring revenue in from all the tourists, which is not a bad thing.

    Want tourists to pitch in? 5% lodgings tax on all motel/hotel rooms, dedicated to funding state parks. I did some rough calculations a few years back -- combined with other dedicated revenue streams, that would just about free state parks from the general fund.

    Any revenue package that relies on a sales tax instead of a gross receipts tax is DOA as far as this voter is concerned.

    (And BTW, I run a small business and I don't buy a whole lot of stuff. A gross receipts tax might wind up costing me more than a sales tax. This isn't a case of trying to push the tax burden off on "someone else." I just think sales tax is regressive and terrible public policy, particularly since there are far better alternatives out there.)

  • Anonymous (unverified)
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    Reading some of the posts on here from supposed, "democrats" and "liberals" makes me think that we are not living in a progressive state, but rather a truly RED state.

    A majority of Oregonians are simply too selfish and too ignorant to ever allow a sales tax. They have drawn the line and in this respect, the state may as well be REDDER than RED. There is NO negotiation with a majority of Oregonians, no matter what the benefits.

    I have NO faith that Oregonians will be smart enough to accept this whatsoever. So, it makes no difference if this passes the legislature, whether it balances the budget, whether it actually helps the state or not. Oregonians, stubborn to their very core, will vote it down. I can promise you that.

  • andrew (unverified)
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    The issue is not whether to have sales tax and no other tax. It is whether sales tax should be part of the puzzle.

    UPO compared the tax impact of someone making 100K v 20k and it is true that the 20K person pays a higher percentage in sales tax (although UPO's numbers are suspect because most of the 20K earners income is going to be on goods exempted from sales tax). But regardless when you add the additional income and property tax into the equation, the 100K person pays a higher percentage of overall tax.

    In addition, adopting a sales tax component to the tax structure does not mean other forms of tax reform should be ignored. I support putting the corporate kickers into a rainy day fund (I even support getting rid of the individual kicker). I support increasing the minimum business tax from a minimum $10 to $1000 or $10000 depending on the size of the business. I also support the idea of a more progressive income tax structure where those making more money, pay a higher percentage then those making less.

    None of those additional legitimate progressive tax proposals, however, are reasons not to get sales tax into the mix.

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    Way upthread JHL made some reference to section 95, which starts the list of exemptions. It appears to include exemptions for food, drugs, manufacturing equipment and machinery, farm animals, equipment and machinery, heating oil and gas (but not gasoline). There's more, but the limits of my ability to understand legislatese prevents me from grasping it.

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    I haven't had a chance to look at the proposal, but my guess is that it's just like what Westlund was proposing earlier. And the numbers he provided showed an INCREASE in taxes at the lower income levels and a DECREASE in the taxes owed by the people at the top of the income spectrum.

    The higher your income, the higher the PERCENTAGE of your savings was.

    I'm sorry, but a sales tax is regressive and I am against it. I paid a sales tax for years before moving to Oregon, so I do have some experience with it.

    I'll actually probably write up something in-depth over at Blog for Oregon soon. Just have to get over this damned flu.

  • Anonymous (unverified)
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    (sigh) It's no suprise that a portion of the plan is regressive... but out of context, of course it makes no sense.

    That's like looking at a part of the Governor's renewable energy plan and saying, "Less fossil fuel power? But we'll need more power in the future, not less! That's bad policy!"

    Jenni and Mike Smith, I know you can take a big-picture view of this thing. Try it.

  • nina (unverified)
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    i used to live in washington, land of a sales tax and no personal income tax. can we make that work in oregon?

    i'd like to see some political muscles flexing here. let's see our elected officials talk about making sure big biz pays their fair share as a means of fixing our broken taxation system.

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    A majority of Oregonians are simply too selfish and too ignorant to ever allow a sales tax...

    Why is a sales tax proposal tied to a capital gains tax reduction?

    Why is no one talking about this part of this "progressive" legislation?

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    I think it is important to focus on having a progressive tax system overall, even if parts of it aren't as progressive as we'd like. Remember that property taxes are also lowered for some persons and the earned income credit for low-income persons is raised, so the net result really requires someone, say OCPP? doing the analysis of all factors.

    The bill is a start. I think a good one in broadening the revenue base. But one that needs to be complemented with further reforms, especially in bringing corporations to pay a larger share.

  • JHL (unverified)
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    Why is a sales tax proposal tied to a capital gains tax reduction?

    Maybe because it has to get a broader base of support to pass than just the Liberal Seal of Approval.

    Usually, when things get referred to the voters, they go to the entire state, not just the Democrats. Pesky, I know.

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    I am solidly with Adam on this one. I think we are making the perfect be the enemy of the good.

    Yes, I support higher corporate taxes. I am constantly shocked at how high my income taxes are here in progressive Oregon vs. my previous state, North Carolina, until I realize how much more money NC raised from corporate taxes.

    But I also remember how my children's schools closed for ten days, and how every two years I am wondering when the next budget axe will hit.

    We MUST stabilize the revenue stream to government and a modest sales tax is the way to do it. Yes, it is regressive. So jigger with the income tax (ours is already terribly flat).

    Please don't let this opportunity slip away. A sales tax is vital for the long run stability of Oregon's state budget.

  • Scott (unverified)
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    The good things about Oregon's current tax system: 1) when you add up all the state and local taxes, it's flat (as opposed to regressive, like Washington); 2) ummm...

    The bad things: tax revenues are volatile, businesses get off too easy, and not enough revenue is raised.

    Adding a sales tax would only slightly decrease the volatility (I work as an economist for the state of Washington, and have followed their revenue forecasts for years). A sales tax would make our tax system more regressive (richer people spend a greater proportion of their income on investments and services, and lesser proportion on goods, than middle- and lower-income folks), unless it was balanced by adding some progressivity to the state income tax. A sales tax would raise revenue from out-of-state tourists-- but according to previous State of Oregon studies, the amount raised would just cover the administrative costs for having a sales tax (it's another whole collection system, requiring auditors). A sales tax would raise money from the underground economy--the one certifiable plus.

    And when I say sales tax, I mean a general tax on goods. Taxing services would make it less regressive, because wealthier folks are the ones who make the most use of accountants, law firms, etc. The Florida legislature voted in a sales tax on services a number of years ago--it lasted about 90 days before it was rescinded, due to intense public pressure (you can guess where the pressure came from).

    To fix the three "bad" things about Oregon's tax structure, while not making it more regressive:

    1. Get rid of the kicker.

    2. Rainy-day fund.

    3. Renter relief, and homestead exemption to lower the property tax burden on residential property.

    4. Add revenue while maintaining a flat tax by adopting a sales tax (food and pharmaceuticals exempted) and making the income tax progressive by reducing the tax rate for low-income and middle-income households.

    Check out the study by the Institute on Taxation and Economic Policy at http://www.itepnet.org/wp2000/text.pdf. Compare Oregon, Washington, and California tax burdens on low-income households. Imagine Oregon with more revenue, and with a tax structure looking a bit more like California (can't believe I'm writing this).

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    The idea that the addition of a sales tax makes the tax system less unstable is itself flawed. There are sales taxes in place throughout the world that are combined with other taxes, and there are oh, so many examples of governments with varieties of taxes that have had mad swings of income.

    Other states have less variation in their revenue streams in part because other states have more diversified economies. If Oregon had a more stable economy, the revenue stream would be more stable.

    I've pointed this out before, but Washington's had a commission looking into problems with their sales tax for a few years. It's not a panacea.

  • Chuck Butcher (unverified)
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    If the good is making the revenue stream stable on the backs of low income workers and skilled trades I'd like to know the definition of bad. You will not give these people enough break in income tax to make up for the 5%. I've lived with sales taxes and they are in every instance regressive. Once these folks pay their rent and groceries (toilet paper ain't groceries - use leaves) they will pay 5% on every cent they earn plus income tax. They're already hammered by FICA and you all think piling on is a swell idea. Rich folks will skate, you know those stocks you plan to buy, no sales tax. You know that car you plan to buy and finance? With interest you will pay a minimum of double on the sales tax to the finance company. Oh, you low incomes don't pay any taxes anyhow, nonsense, 15.4% right off the top of every cent of wage - FICA. Now on $200,000 it's 7.7% of wage. You know all those pages on the 1040 that you fill out, well they fill out 1040EZ and get crapped on, they've got nothing to put on those extra pages.

    Damn, BushCo's got nothing on you backers of this mess.

    You don't stop to think, the income tax revenue goes to hell in bad times because the majority of it rests on the people who get hammered - that's not the well-to-do. The damn income tax is already regressive.

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    Scott makes some good points above, I would be in favor of a plan similar to what he outlines.

    The point is that the plan put forth by these moderates is a compromise plan. I think it's good and better than what we have now. But I'd love to see progressive activists get together and come up with a similarly detailed alternative proposal.

    It would be great to have an ideal progressive tax reform plan written up by some of Oregon's best and brightest progressive Democratic activists. Why don't we have a tax reform plan like this already sitting on a shelf somewhere?

    Because we are better at identifying what we are against than what we are for? Because it would be too hard to come to any agreement? So is the strategy to let the moderates and conservatives take the lead and then just take shots at whatever they propose? Sounds like a pretty reactionary strategy to me, rather than a progressive one.

  • (Show?)

    Why is a sales tax proposal tied to a capital gains tax reduction?

    Maybe because it has to get a broader base of support to pass than just the Liberal Seal of Approval.

    Fair answer, JHL. But I'd like to hear from "progressives" who justify this tradeoff --a regressive sales tax imposed along with a capital gains reduction to, uh, balance it out? What flavor Kool-aid are they passing out in the Capitol these days?

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    Kari, you might want to check your data.

    Thanks, Jack. I'll find that source. It wasn't that long ago. Probably another study. Studies show, studies show...

  • Mike Smith (unverified)
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    One thing I like about the sales tax is that it helps to shift the tax burden towards businesses a little bit. I know it's being accompanied by a reduction in income tax, so another thing that could be done to counter the regressiveness of a sales tax is to either increase the standard deduction on income tax, or lower the rate in the lowest tier for income tax. To counter the losses from either of these options, don't lower the rate of the highest tax bracket as much as planned.

  • Bob Tiernan (unverified)
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    Not unless one of the other taxes, either property or income, is totally eliminated.

    Bob Tiernan

  • djk (unverified)
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    We MUST stabilize the revenue stream to government and a modest sales tax is the way to do it. Yes, it is regressive. So jigger with the income tax (ours is already terribly flat).

    Please don't let this opportunity slip away. A sales tax is vital for the long run stability of Oregon's state budget.

    A sales tax is one way to help stabilize the revenue stream. It's not the only way. We could have a stable stream with income tax, by eliminating the kicker and transferring surplus revenue into a stability (rainy day) fund, coupled with some reasonable, flexible spending limits.

    And a question for every "sales tax" supporter on this board: why is a sales tax on consumers better for Oregon than a gross receipts tax on businesses? (And before you say something about driving businesses out of state, Washington imposes a gross receipts tax and hasn't suffered a mass business exodus.)

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    TR: If the tax trolls in Salem truely wanted to bring equity into the tax system instead of just advancing a socialistic agenda, bicyclists would be directly taxed for their use of the road instead of relying on subsidies from other resources to pay for bicycle infrastructure.

    Sigh. It really is sad that the only comment I get is from a troll so totally clueless about macroeconomics. Although maybe that's just the general state of knowledge in the body politic.

    I had expected on this forum some pushback from people more liberal than I am. After all, it's not always easy to sell a plan that gives people more control over whether they pay taxes or not. In the olden days, that would be called a "conservative" idea. But the modern Republican party has so lost touch with reality, that their stalwart defenders now call it "socialistic".

    Well, since you love the current system we have so much, TR, why don't you expound on why we should be discouraging employment by taxing it - while giving pollution a free ride? Please note: feel good platitudes like "cut unspecified spending!" won't cut it. We have to raise the money somewhere to pay for goverment, including your psychotic little war. Adding in the interest charges and the long term disability for 50,000 US soldiers, the pricetag for Iraq has topped 2 Trillion ($2,000,000,000,000) dollars.

    Should I mention that, if you want to talk about "socialistic controls", the governmental subsidies for automobiles dwarf every other mode of transportation? Gas taxes account for only 55% to 60% of the money spent on highways. Why people who don't drive should be forced to pay taxes to subsidize the remainder is something you need to explain. Fair warning, whatever bulls**t reasoning you come up with, I'll term a defense of the "socialist automobile worker's paradise", because that's what it is.

  • Garrett (unverified)
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    I think that I take heart from this discussion. What I've come away with is this topic is so volatile that this has no chance of passing because it would be political suicide. Oregonians don't want a sales tax and have proven that time and time again. I'd rather know what something is going to cost in the end anyway.

  • (Show?)

    There's a chart on page 3 of this Washington Dept. of Revenue report:

    http://dor.wa.gov/content/statistics/WAtaxstudy/Chapter_9.pdf

    Take a good look at it. Under their system, households with less than $30,000 in income pay an average of 10% of their income in excise taxes. That drops precipitously to about 6% at the $30K mark, then continues on down to 4% at $130K.

    That's the system sales tax proponents are suggesting we add.

  • (Show?)

    has anyone ever heard of a sales tax not growing? once it's in place, once we've drunk the koolaid, it's so much easier to ratchet it up, bit by bit (the old frog in pot of water allegory).

    i wish i could remember (from many years ago, in grad school) the type of sales-ish tax that could be 1% and make loads of money -- i think it's probably the service tax mentioned above. or maybe it was on the sale of goods to producers, a small amount at each level, spreading the burden widely. of course that gets passed along to consumers, but it is spread out and not simply imposed on the consumer at the end of the line. sorry for being ignorant, but we do need to change the system and this sales tax is exactly the wrong answer.

    (and it appears, so is Ben Westlund.)

  • (Show?)

    Cool your jets TR

    The vast majority of bicyclists are also licensed drivers who already are paying for their place on the road. Since its rather difficult to ride a bike and drive a car at the same time, I consider that the vast majority of bicyclists are paid up in full. There are too many other blatant discount passengers on Oregon's ship of state for the remaining full fare passengers to worry about bicyclists.

    After the last election, I thought serious tax reform -- broadening the number of people paying taxes rather than reducing them as we have for the last 30 years in this state -- was two or three sessions away.

    Thanks to a handful of courageous Republicans who have rejected their party's reckless borrow-and-spend practices of the last 15 years, tax reform is suddenly on the door step.

    Let's give this idea a chance to be worked on, and perhaps worked out. It would go to the voters in any case, the initiative and referendum being what they are. It would be a shame to poison the waters before we've even had a chance to test them.

    More next week.

  • Madam Hatter (unverified)
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    NO, NO, NO!

    The only argument I've seen to the statement:

    "Taxpayers in every income range could expect to pay less in taxes, except some taxpayers who earn too little to owe income taxes."

    is that somehow services for these same poor will magically be increased. Besides that being a real leap of faith, it makes no sense. So, you wanna tax me more... to pay for more services for me? Okaaaay.

  • (Show?)

    Take a good look at it. Under their system, households with less than $30,000 in income pay an average of 10% of their income in excise taxes. That drops precipitously to about 6% at the $30K mark, then continues on down to 4% at $130K.

    That's the system sales tax proponents are suggesting we add.

    But, hey, this "progressivity" is in exchange for lowering the capital gains tax!

  • Chuck Butcher (unverified)
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    Which economic wizzard that thought up doing this again on the basis of stability didn't stop to look at WHY income tax is unstable in OR? It is bottom based. If you tax the snot out of those who lose first and hardest in a down turn you lose massively in revenue. Meanwhile, the rich skate. If any of you sales tax "progressives" have an accountant friend why don't you find out how income is sheltered from income tax?

    Quite honestly you piss me off. I pay workers as well as I can and at or above local pricing, I work shoulder to shoulder with them in the construction business I've spent over 30 years doing. They work hard, they work smart, and they get screwed, and it's really offensive when the screwing is done by "progresives." I can understand the Republican Plutocratic Party doing it, it's their game, but you all piling on makes me crazy.

    Go ask your home's shopper just how much of the weekly "grocery" bill is unprepared food and how much of it is all the things that keep the house going. You get to pay x% sales tax on everything that isn't unprepared food. Now take $1600/month subtract the going rate for 2 bed apt & food & see what's left and then pay x% on every cent of that. Now do it to $2500 and add on OR income tax to your precious sales tax, don't forget to take 7.8% off the $2500 first for the employee FICA. Let's drive a stake in the heart of labor and call it stability.

    I'm not a tax reactionary, hit my S-Corp a little harder, make the income tax seriously progressive, quit the kicker nonsense - see I'm costing me money, but you can go hang when you try to screw my guys.

  • (Show?)

    If someone made me king and I could create any system I wanted and have it pass and stick, here is what I would do:

    1) Make the income tax more progressive. Eliminate it for more poor people, reduce the rate for the lower middle class, and increase the rate on the upper middle class and the rich.

    2) Make the tax rate the same for capital gains tax, and dividend tax, and peg it at the same rate as the upper middle class income tax rate.

    3) Create a european style VAT tax, or gross receipts tax, or sales tax. Exempt rent, groceries, medicine, clothing items under $50. Having this kind of tax in the mix, while not as progressive as an income tax, is important to have in order to broaden the tax base by collecting some tax from tourists and the underground economy, and to stabilize revenue streams through tax diversification.

    4) Replace the gasoline tax with a carbon tax that applies to all fuels/energy sources based on carbon content/co2 emissions. Amend the consititution so not all of has to be spent on asphalt.

    5) Go through the tax expenditure report with a fine toothed comb and get rid of all the silly corporate welfare and rich people tax breaks that are in there.

    Do all that and I guarantee all of Oregon's problems will be solved.

  • Pencil Neck (unverified)
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    Adam: If someone made me king and I could create any system I wanted and have it pass and stick, here is what I would do:

    First, your second point could be improved Capital gains tax should be pegged at the highest income tax rate. Period. There is nothing gained by pegging it lower then that. With all the tax exempt retirement plans available, you won't discourage savings. Secondly, by not over incentivizing capital, you won't encourage larger boom/bust cycles then the region/nation.

    Second, so how does this bill get us any closer to that ideal anyway? It doesn't. This proposal is not better than the current system. It is more regressive.

    Regressive taxes erode economic opportunity for those struggling at the edge, and increase reliance on social services. It increases volatility. It exagerates class differences which undermine peace and stability in society. That also increases the cost of services, as more energy is spent enforcing class/opportunity differences.

    This is exactly the wrong way to put a third leg on the stool: sticking a four foot pole on the bottom of a short stool and shaving one of the other legs to make it even less level.

    The right place to repairing the tax base is to look to tax exemptions and credits that imbalance the system and eliminating the kicker. Moving the budget cycle to every year rather than every other year wouldn't hurt either, as it could increase the accuracy of projections.

  • screwtape (unverified)
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    To All the Progressives Opposed:

    After looking at all of the comments on this page among those who have offered argument against the sales tax, I say this:

    The current system is FAR more regressive than you currently admit or understand.

    The REASON: The poor, as well as everyone else in Oregon, are subsidizing public costs and capital depreciation caused by all VISITORS to Oregon. And they are many, business & pleasure.

    Roads, bridges, public safety, law enforcement, planning, EVERYTHING incurs cost when someone visits the Coast, visits Wieden + Kennedy about a new marketing campaign, or shows up to ostensibly push their documentary about global warming. And they pay very little for it. Nope. the poor - and everyone else - have to unfairly foot the bill.

    So to argue that a sales tax would be regressive on the poor is either disingenuous or ignorant. Frankly, it's a bit ridiculous to say such things when the Oregon Department of Community & Economic Development is greatly funded by the worst poor tax of them all: the lottery.

    But I don't see torches and pitchforks over that one on this website. Why not? Alternatively, a sales tax is not similarly addiction/desperation driven and can be tooled very specifically to target or avoid specific populations, i.e. food exemptions, certain services, etc for low-income & seniors. The lottery, unfortunately, is also well-honed but it pinches the wrong people.

    I think for many folks on here, some reconsideration is in order. I think we can all agree the system is broken, but the argument against the sales tax is misinformed if the primary argument is a knee-jerk "regressive" opinion. You're not looking at the whole, ugly picture.

  • (Show?)
    <h2>screwtape, if you think progressives haven't complained long and hard about the lottery being regressive, you must have missed the past quarter century here in Oregon. Ecumenical Ministries of Oregon filed lawsuits well over a decade ago in an attempt to prevent video poker's spread. But I think the reasons you're not seeing the lottery mentioned here in this discussion is that one, the lottery is far smaller in size than a sales tax, a sales tax is a mandatory means of taxation rather than a voluntary means, and finally, there's no chance of heading off the lottery, it's been around since the early 80s. There isn't currently a sales tax, so people who are concerned about a further lurch into regressivity might have a better chance of staving it off (again) than they have holding back the lottery.</h2>
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