Address Oregon's Real Problems: It is <em>not</em> time for a sales tax

Chuck Sheketoff

In an oped that appeared in a couple papers (see this and this) including The Oregonian (PDF), West Linn State Representative Scott Bruun called our tax system the worst in the nation and called for implementation of a broad sales tax with a 50 percent reduction in the income tax. Here at, Jeff Alworth asked "Time for a sales tax? and set into motion a lengthy discussion. Alworth began his post with a cite to a blog post titled The Time for Tax Reform in Oregon is Now over at The Oregon Economics Blog by OSU Assistant Professor Patrick Emerson. Much of the discussion was about whether a sales tax is regressive (not based on ability to pay).

As noted in Addressing the Regressivity of Sales Taxes: Hard to Overcome and Made Worse by Income Tax Cuts, unless a sales tax is imposed only primarily on items purchased by upper income households, they are not based on ability to pay - in other words, they are regressive - the less income you have the taxes comprise a higher percent of your income, even when necessities are exempt.

Here's my response to Bruun (and Alworth and Emerson), published in The Oregonian this week:

As of November, nearly half the states in the nation were facing budget shortfalls, service cuts or tax increases. But not Oregon. So if Oregon's tax system is the worst in the nation, as a commentary last week by state Rep. Scott Bruun contends ("Changing America's worst tax structure," Dec. 18), why are we outshining nearly half the country?

Bruun contends that Oregon's tax system cripples our economy, is family unfriendly and produces either feast or famine. His solution is a broad-based sales tax, accompanied by cutting income taxes in half.

Like Bruun, I serve on the Revenue Restructuring Task Force created by the last session of the Legislature. From my vantage point, Bruun's assessment of our tax system belies reality, and his proposal misses the mark.

It's simply fantasy to say that Oregon's economy is crippled. Despite the high tech-driven recession that struck the country in 2001, Oregon's GDP -- its gross domestic product -- has risen 45 percent this decade, faster than the 43 percent gain experienced nationally. Our job growth in the current expansion is beating the nation, too. Since the national recession officially ended in November 2001, Oregon has seen 8.9 percent job growth, stronger than the 5.7 percent job growth nationally.

Our real economic problem is growing income inequality. Only the highest-paid fifth of workers saw their earnings rise faster than inflation during the first three years of the current economic expansion. The rest of those in the workforce saw their wages fall. From 1980 to 2005, the top 1 percent of Oregon households saw their average real income skyrocket by nearly $580,000. The typical Oregon household, by contrast, saw its income improve by just $618.

We suffer from an economy for the few. Bruun's proposals would make Oregon's economy even more lopsided. His income tax scheme would heavily benefit the wealthiest. Given that from 2002 to 2005, nearly all (97 percent) of Oregon income gains went to the richest 1 percent -- households with annual incomes exceeding about $360,000 and averaging about $862,000 -- I can't fathom the logic in exacerbating Oregon's income inequality by granting a 50 percent tax cut.

The income tax on capital gains not only modestly helps constrain income inequality, but it's the best player on the income tax team. It contributes greatly to funding public services when the economy does well. Bruun's proposal to slash the tax on capital gains would relegate our income tax to mediocrity during good economic times.

Unless limited to services and items primarily purchased by the wealthy, a sales tax is inherently unfair. Bruun's scheme isn't limited in this manner. He calls for a sales tax "on all consumer purchases except food, medicine and medical services." Even with those exemptions, the tax would fall more heavily on taxpayers with lower incomes. The less income you make, the more tax you would pay as a percentage of your income -- an unfriendly scheme for most of Oregon's working families.

Bruun correctly notes the instability in Oregon's tax system. But he makes it seem as if there's no way to add stability without a major overhaul and without making the system less fair. That's wrong. We just have to save more in our reserves during good economic times to have stability during a downturn.

I hope the Revenue Restructuring Task Force can devise a plan that will bring fiscally sound stability to our system. And I will look to Bruun and other political, business and civic leaders to join in making this prudent fiscal policy for stability a reality.

Let's work on the real problems - adding stability to our fiscal system and addressing income inequality.

Ocpp_final_1 Chuck Sheketoff is the executive director of the Oregon Center for Public Policy.   You can sign up to receive email notification of OCPP materials at</p

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    Ouch, calling me out! I saw your response (Friday?), and meant to put this up--sorry I haven't been able to get to any serious blogging lately. The truth is, for those who didn't find it patently obvious--I am not an economist; I merely play one (badly) on BlueOregon.

    I'll wait for the better-educated to dispute your argument. Looks good to me.

  • Marty Wilde (unverified)

    It is true that sales taxes are regressive, in that they tend to disproportionately fall on regular folks. Say your household makes $50K a year and you spend half of it on taxable goods. At a 10% sales tax, you'd end up paying $2,500, or about 5% over your income. A household making $100K probably does buy more stuff - say $40K in taxable goods, thus paying $4K in taxes, or 4% of their income. So, the rich do pay less.

    The traditional way to offset this is to give an annual refund. In the example above, say the State "kicker" is $1K a year per household. The $50K family ends up paying $1.5K, or 3% of their income, while the $100K family ends up paying $3K, or 3% of their income.

    There are other ways of tinkering with it to make it more progressive or more positive (say a $1.2K kicker if it goes directly into an IRA, that sort of thing). I guess the point is that sales taxes are not incurably regressive. They just have to be thought through.

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    Ask the poor family who has to put back food items to cover the sales tax on needed items if they think a sales tax is regressive or not. An annual refund is great and all, but when you can barely afford to buy the necessities as it is, every dollar in sales tax paid is an item they can't buy when they need it.

    I can't tell you how many times I saw my older sister (who was on welfare and food stamps at the time) have to put back food so that she could cover the sales tax on toilet paper, shampoo, socks, etc.

    I've watched poor people for years have to deal with sales tax and the hardship it puts them in. I keep seeing the same ideas put forth over and over again on how to make the sales tax not be regressive. These ideas have been used in other states, and the numbers there clearly show the taxes to still be regressive.

    Yes, we need to fix the tax system, but we don't need to do it on the backs of those at the lowest income levels.

  • LT (unverified)

    If sales tax is off the table because there couldn't possibly be a sales tax written to exclude grocery store items except perhaps alcohol, cigarettes, etc. then what are the other ideas? Chuck saying "Unless limited to services and items primarily purchased by the wealthy, a sales tax is inherently unfair. " is not the same as the old "sales tax over my dead body" refrain from a couple decades ago.

    So, what are some other ideas? And why must they be "revenue neutral"?

    More income tax rates so that the professional athlete, CEO, school superintendent aren't in the same tax bracket as the secretary, janitor, half time library assistant? A tax on restaurant meals? Bringing out every single tax break in the Tax Expenditure Report and discussing each publicly? Changing the kicker percent from 2% to 5%? Eliminating the supermajority requirements? Ending unfunded mandates? (OK, Kevin, you want to be "tough on crime", tell us how you intend to fund your ballot measure--gimmicks not allowed.)

    There was a story on that a number of fed up famous politicians (from Bloomberg to Gary Hart to Chuck Hagel, among others) are putting together a serious bipartisan operation to end polarizing political games in Washington DC. Maybe something like that is needed here.

    But don't tell me sales tax is regressive. Period. End of story--give alternatives. We don't want to ever repeat the 5 special sessions of the early 21st century when each revenue forecast was worse than the one before.

    If Mike Huckabee could tell his legislature that there were taxes he would support to end a fiscal crisis in Arkansas, do Oregonians really want to believe that sort of problem solving isn't possible here?

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    But don't tell me sales tax is regressive. Period. End of story--give alternatives.

    If you want a regressive tax, then just modify the income tax rates so that they takes a higher percentage from low-income households. Switch from the 5% graduated to 9% to a system that goes the other direction: take 9% of lower incomes and 5% of higher incomes.

    That's an alternative. The real question is what's it an alternative to?

    What is the rationale for implementing a sales tax? Despite the conventional wisdom, a sales tax doesn't necessarily add stability to a tax system. The whole "third leg of the tax table" argument is bogus, if you actually look at the data from other states.

    California: "California's sales tax is the ultimate roller coaster"

    Washington: "Sales and use tax is the most volatile revenue source [in Washington]"

    A predictable revenue stream is certainly a great goal, but you can't get there by adding further volatility into the system. A truer analogy than the table would be juggling. By adding sales taxes, you go from two balls to three.

    So a sales tax is great if your intention is to add unpredictability to the system, to raise the tax burden on the low to median-income households, and to cut property taxes and capital gains for higher-income households, but I guess I'm not seeing any specific advantage to Oregon's revenue stream in any of those three goals.

    Both California and Washington had stable and increasing revenues when their economies were good. Big surprise.

    Sales Attacks, Pt. I Sales Attacks, Pt. II Sales Attacks, Pt. III Sales Attacks, Pt. IV

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    If sales tax is off the table because there couldn't possibly be a sales tax written to exclude grocery store items except perhaps alcohol, cigarettes, etc. ...

    You are aware, LT, that pretty much every sales tax in the US does exempt grocery items (and medicine) and they still take a higher percentage of low-income earnings, aren't you?

  • bc (unverified)

    Excellent op-ed. And agreed -- those of us who oppose a sales tax should present alternatives. OK, how about adding another bracket to the income tax so that multimillionaires and middle-class Oregonians don't pay the same rate? How about restoring the balance between corporate and invidividual tax revenues to what it was 15 years ago, before the Republicans took the Legislature and Measure 5 exacted its price? How about a carbon tax? Yes, it's a sales tax but has plenty of other benefits besides raising revenues.

  • jessibeaucoup (unverified)

    There's a lot of talk about sales tax and how regressive it is. I agree that we have to address the income inequality in this state (and country) but I'm surprised that increasing cap gains rates is rarely, if ever, suggested. Currently, rates are highest on earned income and lowest on cap gains and dividends. Does that make any sense if you're interested in reducing income inequality? Let's eliminate the favorable rates for the wealthiest... if we did, we may even be able to reduce the rates on earned income and still be revenue neutral.

  • William Neuhauser (unverified)

    It seems to me that the goal should be a progressive tax system, not whether any one component is more or less regressive. If a sales tax is implemented while also adjusting income tax rates, which includes cuts at the low end, with lesser cuts at the high end, I could imagine the result being satisfactory.

    But the real issue, it seems to me, as Chuck points out, is that we should spend less time worrying about the tax tail than the income dog -- the problem we face in Oregon and across the US is that lower and middle class income has not grown since the Republican experiment began in 1980: cut taxes, hope for trickle-down, limit government effectiveness. That experiment has undermined the "ladder of opportunity", while creating dynastic wealth for a few.

    The problem isn't that taxes are too high, the problem is that incomes are too low.

  • JHL (unverified)

    Ask the poor family who has to put back food items to cover the sales tax on needed items if they think a sales tax is regressive or not.

    Okay, that makes sense if we're looking at an isolated sales tax.

    But no one in Oregon who has proposed a sales tax -- neither the Republicans nor the Democrats -- has proposed a stand-alone sales tax; they've always coupled it with a reduction in the income tax. The Legislative Fiscal Office has run projections on both SB 382 (2005) and the "Revenue Coalition" plan that was being kicked around in 2006-2007 and estimated a net financial gain at all levels of income.

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    But no one in Oregon who has proposed a sales tax -- neither the Republicans nor the Democrats -- has proposed a stand-alone sales tax; they've always coupled it with a reduction in the income tax. The Legislative Fiscal Office has run projections on both SB 382 (2005) and the "Revenue Coalition" plan that was being kicked around in 2006-2007 and estimated a net financial gain at all levels of income.

    There's not really a difference between the sales tax programs proposed by Democrats and Republicans, and the estimates used by the SB382 proponents are flawed.

    Here are the goals of SB382, from a PDF document provided by Ben Westlund's gubernatorial campaign a couple of years ago:

    • Increase Stability of Revenue System
    • Stimulate Long-Term Economic Growth
    • Maintain Proportional Distribution of Tax Burden
    • Reduce Reliance on Personal Income Tax
    • Reduce Tax Burden on Capital
    • Establish Broad Based Consumption Tax

    As I've pointed out before -- here and elsewhere -- the "stability" goal is an illusion. Studies from the revenue departments of both California and Washington state show that a sales tax is the most volatile portion of their tax system. Now, Washington doesn't have a personal income tax, so that's only relative to their other taxes (property taxes being the least volatile), but the California study -- based on actual data from more than two decades -- shows that the sales tax is more volatile than their income tax. The OTIM computer model used by SB382 proponents makes the assumption that sales taxes are less volatile than income taxes.

    There's simply no way to "maintain proportional distribution" of the tax system by simply cutting income taxes. If you add a regressive tax component to a system it makes the system more regressive, unless you make other elements of the system more progressive to counteract the regressive effect. That's simple math. SB382 didn't do nearly enough to counteract the regressive nature of the sales tax, which in Washington (even with grocery exemptions) affects low-income households by a proportion of 300% more than it does upper-income households. The data from the Westlund campaign estimated a 5% sales tax would take in $622 from a household with an income of $25K. Washington's figures say a household of $25K paid about $1,084 at a tax rate of 6.5%. When you scale that figure down by the ratio of 5:6.5, you get $834, a third again as much as the SB382 estimate. Now, either the raw sales tax proposed by SB382 is exempting a lot more items than Washington's, or there's a serious problem with the model.

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    those of us who oppose a sales tax should present alternatives

    I'm not sure why. I don't think I should have to present alternatives to someone offering to chop off my hand, for instance. If it's a bad idea, it's a bad idea.

    The question isn't whether a sales tax is needed or not. It's whether more revenue is needed and whether there are ways of making revenue streams more predictable. I'd say yes to the first question, and probably to the second, but adding a regressive, unpredictable new revenue stream like a sales tax balanced with cuts (as Rep. Bruun suggested) in more predictable revenue streams isn't going to do either of those things.

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    OK, Darrel, since you agree that more revenue is needed. What's your alternative?

    I've always opposed the sales tax, but at least the pro-sales-tax people have an idea for more revenue. What's ours?

  • Rose Wilde (unverified)

    I got interested in this topic and followed some of the links in the article. I also read a very interesting article from the Economic Policy Institute linked to Oregon Center for Public Policy's page that questioned whether state and local tax incentives actually enhance the business climate (in short, not really).

    I think that we must include all taxes, not look at one in isolation. Income taxes can be adjusted to compensate for sales taxes, or we can use the rebate idea mentioned above. Like the earned income tax credit, rebates can be doled out in monthly portions based on projected income, to avoid the feast and famine cycles. But this does seem unnecessarily complex.

    Now I fully admit economic/tax theory isn't my strong suit. That said, it seems pretty clear to me that we have a fundamental mistrust of government here in Oregon which manifests as tax-resistance and opposition in many forms. Many of the progressive activists I've worked with seem to have the naive expectation that Oregonians will pay for government services that help the poor and vulnerable. While I wish this were true, having watched two local taxes fail in Lane County in spite of obvious disintegration of key services (law enforcement for one), even in relatively progressive Lane County we can't seem to persuade anyone to vote for a tax. Perhaps we should follow in the example of Multnomah County and tax businesses, who clearly don't pay their fair share?

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    I've always opposed the sales tax, but at least the pro-sales-tax people have an idea for more revenue.

    You may have "opposed" it, but you've certainly "pondered" one:

    One idea that I've been pondering.... What if we had a relatively high sales tax rate, say 8%, and then rebated back to every single citizen some equal amount... say, the amount equivalent to the taxes paid on a basic necessities basket of goods.

    If you're simply looking for a method of raising revenue why not just advocate a poll tax, Kari? Easy to implement, easy to administer.

    You wouldn't support that because you know that a per capita flat tax is inherently unfair.

    Saying that people who support a sales tax at least "have an idea" completely discounts the fact that what they're proposing -- despite the fact that it's used throughout the world -- is a means of further shifting the costs of government from the people earning the most income and currently paying the bulk of those taxes (half of Oregon's personal income tax is collected from the 9% of filers in the $100K+ income bracket) to the rest of the population.

    We have a tax system. Rates can be adjusted to bring in more revenue.

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    And I have to ask again, what's the rationale for having a sales tax whether it brings in more revenue or not? It's potentially unstable. If its regressive nature is going to be countered, the rates on income tax are almost certainly going to have to be made aggressively more progressive (something that could bring in more revenue without a sales tax), and there may need to be some sort of rebate check mailed to most taxpayers multiple times a year to help them deal with having a significant portion of their income locked up by the state for most of the year.

    Oh, and did anyone else notice that SB382 provided for a "Retailer Compensation Rate @ 1.5% of Gross Collections" that amounts to a figure half the size of the budget of the Department of Revenue?

  • Marty Wilde (unverified)

    Ms. Simonis -

    Just because a tax is more visible doesn't make it more regressive. Income taxes are taken from paychecks, while sales taxes are taken on purchases. It's the same to a poor family either way. Arguably, it's fairer to have a sales tax, because at least what you see is what you get, which allows people to make intelligent decisions.

    I also note that the federal EIC works exactly the same way - taxes are taken from income, then returned (plus some, since it's fully refundable) at the end of the year.

    All -

    The best arguments I've seen for a sales tax are that it would stabilize income to the State. That being said, there seems to be little stomach for actually doing it. The rainy day fund has more support and accomplishes the same goal. Shouldn't we direct our efforts in that direction?

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    <blocklquote>The best arguments I've seen for a sales tax are that it would stabilize income to the State.

    But the people who make that claim aren't necessarily telling you the truth.

    California: "California's sales tax is ultimate roller coaster"

    <blocklquote>"California's income tax base is, surprisingly, not the most volatile of the three major sources of government income. It is at least as stable as property assessments and far more sedate than taxable sales."

    Washington: "Sales and use tax is the most volatile revenue source."

    There shouldn't be any stomach for something like that.

    As for your argument about income taxes being taken from checks, they are indeed, but because the amount taken is indexed to the income and adjusted for exemptions (dependents, etc.) they're already adjusted for a progressive structure. You don't pay a different sales tax when you make less money, which is why you end up paying a higher percentage of your income in sales taxes the less money you make, because you spend a higher percentage of your income on taxable items, even with groceries and medicine exempted. Almost 7% of your income in Washington state if you make under $20K. Just under 3% if you make more than $100K (2.2% if you make more than $130K).

    9% income tax in Oregon vs. 3% of your income in sales tax in Washington. Is it really any wonder why people making more than $100K might prefer having other people support their lifestyle? It looks like there might be 5 or 6 thousand reasons.

  • LT (unverified)

    All due respect folks, but this discussion doesn't seem to be getting anywhere.

    Say what you will about Mike Huckabee, he has better communication skills (esp. with the sort of ordinary folks who decide elections) than many politicians of any persuasion.

    Below is the link and an excerpt from Gov. Huckabee on Meet the Press today. Say what you will about some of his views, I seem to remember conversations on this blog about framing discussions.

    Huckabee talks about the importance of highways in good condition, paying for education incl. raising teacher salaries, and tax reform which gave poor people tax relief.

    40 years or so ago, a well known politician was famous for saying, Some people look at things as they are and say why, I look at things as they should be and say why not?"

    More recently, someone talking about the power of rhetoric was saying people want to be inspired: "I don't recall Martin Luther King's I Have A Plan speech, but I vividly recall his I Have A Dream speech".

    Yes it is important to work out the details, but the general public is more likely to be convinced by any campaign (statewide tax or locally for a new fire station) if they see both the vision and a plan to carry it out. Too often, debates in this state never get to that point because they get stale--the anti-tax team vs. the folks who want more services, for instance. As if it is a team sport with voters merely spectators.

    In my experience, not only framing but general communication skills will carry the day more than theory or ideology ever will. Huckabee was asked questions and he answered from his own experience. Aside from Ron Wyden, John Kitzhaber and Tom McCall, I have rarely seen anyone answer questions about their own proposals, beliefs and experience than Huckabee today. Agree or disagree, please regard Huckabee's answers to the questions as a tutorial in Communication 101.

    He made claims about things like tax increases, but he failed to mention that some of those were either court ordered or they were voted on by the people and approved by the people for things as roads. And I left my roads in great shape, took them from the worst in the country to what Truckers magazine said were the most improved. He left his roads in a mess in Massachusetts, with huge problems in the infrastructure. He claimed that he didn't raise taxes, but, in fact, he did raise taxes by half a billion dollars.

    MR. RUSSERT: Fees.

    GOV. HUCKABEE: Fees. It's a tax. If you're a small business person and you pay more money than you paid last year to the government, you can call it a fee, call it a tax, it's a three letter word that means the same………………………….

    MR. RUSSERT: But you raised taxes, and the Cato Institute, a conservative think tank, gave you a D and an F for your tenureship as governor. So there have been some legitimate criticisms of you as a Republican for raising taxes and for spending money.

    GOV. HUCKABEE: Well, I don't think they're legitimate criticisms when you improve education for the children of your state or when you build highways that give you economic incentives and capacities that, frankly, created the lowest unemployment numbers that our state had over had over a sustained period of time. We saw more new jobs created. That's what being a governor is about. It's about creating opportunities for the people of your state.

    MR. RUSSERT: Even if it means raising taxes?

    GOV. HUCKABEE: Well, in some cases, you know, I cut 94 taxes. People forget what we did do on a positive nature: eliminated the marriage penalty, indexed the income tax for inflation so low-income people weren't paying high tax rates. So what we tried to do in tax policy by doubling the child care tax credit and by raising the threshold at which people paid, we untaxed a lot of the poor people and gave them a shot at actually making it up the economic ladder.

    Now, when we raised taxes, it was one of two things, either to meet an educational demand--our schools were deemed by the courts to be unconstitutional. In Arkansas, we've been down the road of a governor defying the courts and saying, `I'm not going to follow the court order.' Didn't turn out real well. I wasn't going to be the second Arkansas governor to do that. In fact, I'm proud of the fact that we raised teacher pay, proud of the fact that, in every year we tested kids, we saw vast improvements in their test scores, things were--got better, not worse. And education was my ticket out of the, out of the bottom of the economic spectrum. Education is a key for every child. And I want to make sure that if we're going to spend more money--and the court said we have to--then the next thing is, let's make sure we spend it well and we spend it wisely.

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    I don't think cutting the income tax actually compensates much if at all for sales tax increase for lower incomes, particularly for families with children & exemptions. They're apt to pay a lower actual % of their income than what stated rate, because part of the income isn't taxed. So cutting the stated rate isn't going to benefit them much if at all.

    The actual "cut the income tax in tandem with new sales tax" proposals on the table are aimed at getting political support from the middle and upper middle classes. They don't even try to protect the lower middle class and poor from added hardship.

    No one who has come back with "cut the income tax" to compensate for higher sales taxes has addressed Jenni Simonis' point about the different timing of sales taxes and income tax refunds/rebates.

    Poor people already pay a private quasi-tax on consumption for needing to buy stuff more frequently in smaller quantities in order to get a bit of everything they need -- they can't afford to buy given items in larger quantities less often. Also if they don't have cars it's harder to get to bigger stores with lower prices, and harder to manage bulk purchases on public transport. Especially with kids in tow if they don't have childcare help from relatives or friends.

  • (Show?)

    A sales tax will also affect women and children more than men, and affect black people, Latinos and Native Americans more than whites and Asian-Americans, given income distribution disparities.

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    That Mike Huckabee is this decade's version of compassionate conservative George W. Bush is no big surprise. He can talk to the <s>animals</s> common man!

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    This comment shows you just don't get it:

    Just because a tax is more visible doesn't make it more regressive. Income taxes are taken from paychecks, while sales taxes are taken on purchases. It's the same to a poor family either way. Arguably, it's fairer to have a sales tax, because at least what you see is what you get, which allows people to make intelligent decisions.

    Intelligent decisions? I guess having to put back a bag of rice because you have to pay $2 in sales tax on shampoo, toilet paper, and some cleaning supplies is an intelligent decision.

    What happens is poor people end up having to put items back that they need, but can't afford, once they get to the register. I've watched this happen hundreds, if not thousands, of times - with family, friends, and when I worked as a cashier.

    I've personally seen how a sales tax affects the poor. And I've been in the situation myself where we had about $20 a month on top of the $127 in food stamps and a few WIC coupons. Buying food, toiletries, diapers, etc. for three on $147 plus what cereal, cheese, and milk/formula you get on WIC is very difficult - especially when you have a baby (one who has to eat soy formula because of an allergy). Having to pay even $5 a month in sales tax would have meant even less food on our meager budget - especially when you already don't have enough to eat.

  • Tom Civiletti (unverified)

    "It is easier for a camel to go through the eye of a needle, than for a rich man to enter into the kingdom of God." (Matthew 19:24)

    But it is much easier for a rich man to argue his positions in public discourse, aruments such as:

    • Cutting taxes increases government revenue.

    • Wealth is a sign of worthiness.

    • Capitalism is democracy.

    • Wealth trickles down.

    • Limiting consumer suits is the key to controlling price inflation.

    • Campaign contributions are free speech.

    • Single-payer healthcare is un-American.

    And last but not least:

    • Sales tax is not regressive.

    All these goofy ideas refuse to die because they benefit wealthy interests. Why is it that existing successful single-payer healthcare in other countries is not good reason to take our failing system is that direction, but the absence of any progressive general sales tax does not quiet the argument that it can be done here? Somehow, reality is not a good argument for changes that benefit the common man, but theoretical possibility is sufficient to bolster plans favored by the rich.

    Indeed, the constant, well-funded propaganda generated for the sales tax is powerful enough to enlist many salt-of-the-earth Democrats in the cause. The promise of revenue stability [false as it turns out to be] is enough for many Democrats to sell out the base of their popular support.

    Take a deep breath, folks, and consider that some ideas that seem politically feasible are so because they suit the wealthy interests who oppose anything that is truly beneficial to poor and middle class people. General sales is one such Trojan Horse.

  • Frank Martin (unverified)

    "You are aware, LT, that pretty much every sales tax in the US does exempt grocery items (and medicine) and they still take a higher percentage of low-income earnings, aren't you? "

    Hmmm.. I can give you one exception. I lived in Utah when assigned to the Hill AFB from 1993-2003 and I just checked their website..

    Utah has sales tax on grocery items.. and food and medicine. The only thing they have done in all that time.. is to "reduce" the amount of sales tax.. but its still taxed.

    It affects the poor and rich alike. In other words.. You must eat to live, and you must pay the government there for the right to live.

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    Huge FairTax supporter Mike Huckabee takes the Hawkeye State for the GOP

    I'm dying a little on the inside now that I've realized Jeff Alworth and Blue Oregon and our likely "Democratic" state Treasurer candidate are on the same page as Mike Huckabee and the people promoting the FairTax "progressive national retail sales tax". They think he's good he thinks they're good and at last radio show host Neil Boortz has a good idea!

    Tax cuts for everyone. I haven't had a chance to figure out the numbers yet (I may never figure out the numbers) but everyone makes money, apparently!

    The FairTax preserves the overall progressivity of the federal tax burden.
    The FairTax not only lowers remaining average lifetime net tax rates, it also maintains and, indeed, enhances overall progressivity in the tax system. Consider middle-aged married households. The FairTax average lifetime tax rate is very low – only 1.5 percent – for the couple with $20,000 in annual earnings, and much higher – 20.5 percent – for the couple with $500,000 in annual earnings. The reduction in the tax rate is proportionately much greater at the lower end of the earnings distribution than at the high end. In switching to the FairTax, the $20,000-earning couple experiences an 86 percent cut in their average tax rate, whereas the $500,000-earning couple experiences a 42 percent cut.
    <h2>And hey, in their refutation of arguments against theiir plan they characterize opponents to the tax as saying it wouldn't be "politically viable", sort of like Jeff's buddy from OSU did in an attempt to cloud the issue when I pointed out that the numbers didn't add up (who'd have thought an economist thinking about the sales tax wouldn't known that Washington's budget was so sales tax heavy before he started posting about what a great idea it was?)</h2>

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