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Whenever Oregon starts talking tax reform, you can be sure
that, sooner or later, someone will talk about a sales
tax. There's a reason almost all other states have one:
it's a powerful way to raise revenue without many of the
inherent problems with income and property taxes. So
it's no surprise to hear that a state task force looking
at tax changes is hearing some new pitches for a sales
tax, according to the
Bend Bulletin. The most eye-catching idea is being
proposed by one of the task force members, Sen. Frank
Morse, R-Albany.
He would like to wipe out property taxes for most
Oregonians by exempting the first $1 million of home
value. In exchange, he'd make that up with a 6 percent
sales tax. Morse's idea recognizes one truism about the
sales tax: that Oregonians will never buy it unless it
eliminates another tax. This sort of does it, although it
would obviously continue property taxes on commercial
property, not to mention high-value residential property.
I've seen too many of these ideas come and go to figure
this one has much chance. But it's always fun to see what
supporters of the sales tax will try next.
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Statesman Journal
Immigrants and visitors should be subjected to sales tax
CAROL MCALICE
CURRIE
March 14, 2008
It's amazing how just about every
social issue these days can be returned to the debate on
illegal immigration.
Witness my Wednesday column about
a local sales tax.
The expected
anti-anything-except-the-government-programs-that-benefit-them
types responded. However, their numbers were dwarfed by two
other groups: those in favor of a local sales tax and those
who saw it — I'm quoting many here — "as a way to get them
illegals to pay their share."
The community discourse started
with several specious arguments about Salem not being as
nice a place as Ashland. The reasoning ran along lines that
Salem could never hope to attract as many tony tourists as
Oregon's Shakespeare capital.
I disagreed on this point,
pointing out that I much prefer our children's museum,
Pentacle and Elsinore theaters among others, our lovely
waterfront, ambitious and tasty wineries, great sports
parks, etc. to the overpriced downtown that is Ashland.
I will yield on it having a
greater selection of restaurants, but since most were too
expensive for my family of four and we wound up paying the
local food and beverage tax at a Denny's, it's basically a
push.
Supporters of a local sales tax
noted that Salem might lack a well-heeled theater brood, but
it more than makes up for them in ordinary tourists and
residents. Readers pointed out the bunch using the expanded
airport en route to somewhere else and business folks
visiting our efficient and eclectic conference center.
They pointed out the lawmakers,
their staffs, the inherent lobbyists and hangers-on who dog
them everywhere they go and the constituents who proffer
their wants and needs. And who could forget the legion of
drive-through criminals, prisoners' families, students and
other transient populations that add to a metropolitan area
that serves in excess of 250,000 people daily.
That's more than enough. But many
times, I was reminded that a local tax is fair because it
captures migrant and day workers and immigrants here
illegally.
The thought never crossed my mind.
I see all comers as having the
ability to pay a few cents locally on a meal or movie
ticket, on a soda pop or a doughnut or more progressively on
luxury items such as cars and recreational vehicles. This
user tax helps the city and county improve their roads, take
care of their sewage, care for their parks, hire more
emergency workers.
In turn, as one reader pointed
out, the agencies that can't impose a sales tax, such as
schools and transit districts, might have more luck getting
bond measures approved by property owners.
Despite a number of caveats, the
nearly 100 respondents (online, e-mail, phone) supported the
idea of a local tax.
One reader's ending summed it up
well for spreading the cost and easing the burden. Find
public officials who will suggest it: "Miss Carol, you find
them and introduce them & I will vote for them."
Carol McAlice Currie is a
columnist for the Statesman Journal. Her column appears on
Wednesdays and Fridays. Contact her at
ccurrie@StatesmanJournal.com, P.O. Box 13009, Salem, OR
97309; or
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Chuck Sheketoff, Blue
Oregon
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| 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
BlueOregon.com, 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.
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Another View: Oregon sales tax
February 14, 2007
An editorial from The World, Coos Bay,
Feb. 7, 2007
Five Republicans in the Oregon House
have signed onto a bill to enact a 5 percent sales tax
statewide. Those lawmakers think they can slash income and other
taxes to win support.
Nice try.
Nine times in the past, Oregon voters
have loudly said no on similar requests.
At first glance, it’s easy to think
there are a million reasons why people here won’t vote in favor
of a sales tax. Well, there are not a million reasons, but there
are many.
Oregonians know that once a tax —
always a tax. That’s even if the tax doesn’t produce as expected
or ultimately is deemed unfair.
Oregonians know that lawmakers have a
hard time keeping their promises on how they will spend new
revenues or tax monies. Remember the Oregon Lottery and the
tobacco fund?
Sales taxes do put a burden on people
who don’t have a lot of money.
They add to the costs of doing
business in collection and paperwork time, and on and on.
That doesn’t mean a sales tax would
fail.
Over the years, the demographics of
Oregon have changed. There are many more Californians here now,
people who never thought twice about paying sales tax at home.
People who’ve moved in from other states, too, are used to
ponying up extra change for their purchases. But only one Oregon
city — though several have tried — has successfully passed a
sales tax. That’s Ashland’s 17-year-old food and beverage
restaurant tax. Maybe there are now enough people in the state
who wouldn’t be bothered at all by paying more taxes at the
till.
But likely not.
In looking at Oregon history, there
are two big issues that are hard to ignore.
Voters statewide have consistently
opted to cut their tax burden. They don’t seem to care about the
potential loss in services when they have the power of the
ballot. Also, residents are more apt to tax themselves if the
money is spent locally. That’s where they have more control over
its use. That’s where they actually benefit and ensure wise use
of their fees. And, they are more likely to say yes if the
economies in their towns and counties are doing well.
That doesn’t bode well for Oregon
adopting a sales tax.
Sales tax now appears to be a
fairer solution
February 7, 2007
As a resident of this state all of my
life, and having voted against the sales tax every time I could
since it has come up, I now believe it is time for a sales tax
in Oregon only because I feel everyone should pay equally and
nowadays not everyone does. There are those who are getting a
free ride, and that's not right.
-- Ted L. Hendren, Salem
The
Frank Morse plan for tax reform: Let’s talk about it
Corvallis Gazette Times -
Corvallis,OR,USA
... Voters have said no nine times. Sales
taxes are a new tax, even if they are tied to a permanent
reduction in established tax rates. ...
It’s an election year,
and Sen. Frank Morse, R-Albany, is in the hunt for a second
term, yet he has announced a comprehensive state tax reform plan
that most long-time Oregonians would slowly shake their heads
over as political poison: Morse is proposing a 5 percent sales
tax as the cornerstone to a comprehensive tax reform and state
funding package. He is championing it to Oregon decision-makers,
editorial boards and the public.
This isn’t about politics, said Morse; it’s just good business:
A designated 5 percent sales tax — tied to an income tax
reduction and a cut in the capital gains tax — would spur the
economy, put more money in people’s pockets and tap the withheld
resources of the 10 percent of the population that doesn’t pay
taxes and the state’s underground cash economy. It also would
capture taxes from the state’s tourism industry.
The major
necessities of life — including food, gas, medicine, rent and
utilities — would be excluded from the sales tax.
The plan has the support and input of Democratic Sens. Ryan
Deckert and Kurt Schrader, and was crafted with advice from
former state economist Paul Warner. It would both reduce the
income tax burden by $4.4 billion in 2007-09, yet yield a $994
million net tax revenue gain.
Sounds good, but I can almost hear eyes rolling. Voters have
said no nine times. Sales taxes are a new tax, even if they are
tied to a permanent reduction in established tax rates. Over
time, those rates will rise. However, this proposal would lock
the lower income tax rates into the constitution and require a
vote to increase the sales tax rate.
The best reason to give Morse’s plan consideration is that it’s
time to consider a sales tax tied to tax reform. The piecemeal
approach just isn’t working. No initiative petition, Legislature
or tax group has succeeded in adequately, reliably and
predictably funding state government, particularly K-12 and
higher education since voters passed the first major property
tax limitation measure more than 15 years ago.
In a bit of illustrative timing, the lawsuit that Corvallis and
five other school districts filed last week against the state
for failing to adequately fund schools indicates that school
administrators have had it with having to enact ever-growing
lists of unfunded federal and state mandates and never knowing
whether they will have enough money to open school — or whether
they will have to go cap-in-hand to the voters again for an
operating levy.
Morse is a good businessman, and a good leader with a sound
idea. His plan deserves a hard look and fair-minded
consideration.
Theresa Novak is the editorial page
editor at the Corvallis Gazette-Times. An audio version of this
column is available at gazettetimes.com under the “GT to Go”
podcast link.
Poll:
No tax on cell phones
The Business
Journal of Portland - 3-3-06 9:27 AM PST Friday
The Portland City Council has reached the wrong number with a
proposal to create a tax on cell phones to fund schools,
according to the results in last week's
Business Pulse survey.
We asked: "Would you back a cell phone tax to support
Portland Public Schools?"
Your response: 60 percent no, 34 percent yes and 5 percent
undecided.
Some of your comments:
"I'd support any form of consistent funding for our schools.
We are an embarrassment to our children."
"Too much money is already going to schools."
"How about a sales tax? Is it that difficult to realize that
Portland needs a sales tax?"
"A cell phone tax is an inadequate Band-Aid."
"They need to pull more money from the lottery to cover
this."
"A cell tax is absurd."
"How about taxing strippers? I hear they report only a small
percentage of their incomes."
Complete Article Link
http://portland.bizjournals.com/portland/stories/2006/02/27/daily28.html?jst=b_ln_hl
By Matt Cooper
Published: Wednesday, November 2, 2005 "The Lane County
commissioners meet today to debate whether to tax for more
public safety services, fresh from sparsely attended public
hearings Tuesday at which a thin majority of citizens said no
to new taxes."
"Coburg-based RV maker Monaco Coach, for example, opposes
the gross-receipts tax, which could cost Monaco between
$750,000 and $1.5 million annually, said Don Lance, a tax
director for the company."
http://www.registerguard.com/news/2005/11/02/d1.cr.pubsafetyhearing.1102.p1.php?section=cityregion
Thursday, October 20, 2005
I see that three counties are considering a regional income
tax for schools ("Poll will test school tax support," Oct. 14).
Bad idea. Income taxes are levied unfairly -- many do not pay,
and any recession lowers expectations. A much fairer tax would
be an increase in property tax or, heaven forbid, a sales tax.
JAMES GOBBLE, Hillsboro
Link to complete article:
http://www.oregonlive.com/letters/oregonian/index.ssf?/base/editorial/1129805798180870.xml&coll=7
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Posted
by: B. Hunter
Posted:
2/7/07 8:28 pm
