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Legislative panel discusses Oregon sales tax measure

Apr 15, 2013 | 16 Comments


By JONATHAN J. COOPER
Of the Associated Press

SALEM — Oregon voters have rejected a sales tax nine times in the past eight decades. Some in the Oregon Legislature hope the 10th try will be the charm.

A state Senate committee on Monday discussed a resolution asking voters to create a 5 percent tax on goods and services as part of a proposal to overhaul Oregon's volatile taxation system. A sales tax would be accompanied by a cut in income taxes and other revenue sources.

Proponents say they're starting a discussion and don't expect the Legislature to put it on the ballot this year.

Nearly 70 percent of state government revenue comes from the personal income tax, which rises and falls sharply with the economy. Supporters say a sales tax in conjunction with other changes to the tax code would diversify Oregon's revenue sources and make the system more stable.

“It's time for a full-scale, top-to-bottom restructuring of our tax scale,” said Sen. Mark Hass, D-Beaverton.

Some critics say a sales tax would harm low-income taxpayers, who spend a larger share of their income on consumption. Others say Oregonians of all incomes already pay too much in taxes.

“We're just getting squeezed,” Roxanne Ross, of Gresham, told the Senate Finance and Revenue Committee.

The plan was put forward by three Democrats: Hass, Sen. Ginny Burdick of Portland, and Rep. Tobias Read of Beaverton. It would reduce property and income taxes, and create new tax credits aimed at business investment and low-income workers.

The proposed sales tax would go farther than most others states with consumption taxes, assessing services, not just tangible goods. Supporters say taxing services would make their plan more equitable because higher-income taxpayers spend more money on services.

Separately, Gov. John Kitzhaber is working with business groups and labor unions in an attempt to craft a tax-system overhaul that both groups — and their formidable campaign machineries — could get behind. The group is working with political consultants to take the temperature of the electorate and could produce a ballot measure for 2014 of 2016.

Kitzhaber, a Democrat, said lawmakers first need to address the rising cost of prisons and pension benefits for retired government workers.

“I think it's going to be difficult to convince people to support generating significant new tax revenues when a significant portion of that isn't going to go into the classroom, isn't going to important public services,” Kitzhaber said.

The governor didn't take a position on the legislators’ proposal and was careful to point out that it's too soon to know whether a sales tax would be part of a tax overhaul that reaches the ballot.

Sen. Larry George, R-Sherwood, said voters need confidence that the Legislature won't let spending grow unchecked. He suggested the proposal include some form of spending limitation to boost voters’ confidence with the plan.

The committee will hear more public testimony Wednesday.

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Comments

11:33 pm - Tue, April 16 2013
Seabiscuit said:
"The governor didn't take a position on the legislators’ proposal and was careful to point out that it's too soon to know whether a sales tax would be part of a tax overhaul that reaches the ballot."

Yep, he wouldn't commit when the reporters got ahold of him.
Yet, it appears to me that if he wasn't taking a position, he was sure hinting at where he might stand. During the hearing when he was testifying to the committee and talking about the 9 previous voter rejections of a sales tax, he warned the legislators about "making the same mistake again, and again and again",

He also said one of the few things he has said since I first met him back in the early 80's that I can agree with:

"As a biology major, I would suggest white rats learn faster than that," Kitzhaber said.

With that statement the Governor has given us an honest assessment of the Oregon State Legislature.
04:47 am - Wed, April 17 2013
troy prouty said:
It would be wise for Oregon to have three taxes and reduce the income tax, the problem is they aren't going to lower anything. Another problem is the blackmail of companies to get huge tax breaks. give me this or I will leave. We just saw Nike do it. On some scales it doesn't make sense, for example Verizon received 3.1 million per employee at a data center. boeing received 20 Million from the State of Washington to hire 125 workers for 4 years and a 3 cent gas tax to help with roads around Boeing and highways coming and going from...

If you address taxes, you really need to address the issue of companies as well, because let's face it, if they aren't paying someone else is (thatbeing us)...

troy*
06:03 am - Wed, April 17 2013
happy slap said:
How about eliminating income, property, corporate taxes altogether and have the state and counties live within their means only through consumer sales taxes. That might require sales taxes amounting to as much as 25% out of every consumer's spent Dollar, or maybe less, perhaps?
07:50 am - Wed, April 17 2013
Don Dix said:
Not only a 'sales tax', but also a tax on services? So every aspect of living in Oregon can be taxed? When one has visited a dry well nine times and keeps on expecting to find water, it says more about the visitors than about the well.

Sorry happy slap, it might be easier to capture Sasquatch or the Easter Bunny than finding any government (big or small) that will live within it's means.
09:25 am - Wed, April 17 2013
happy slap said:
Only if the service is the product, such as a room tax. Don't want to pay that tax, then don't rent a room. Don't want to pay an alcoholic beverage tax, then forgo the taxed product and exercise your freedom to brew, vint or distill your own. Don't want to pay taxes on tobacco, don't purchase tobacco. Don't want to pay a tax on an admission ticket to watch a ballet performance, then don't spend your money on a ballet theater performance.

Don't want to pay a tax on a pair of Lululemon yoga pants, because your downward facing dog reveals just too much about you, then don't purchase a pair, O-he-whose-brown-eye-yawn's-not-quietly.

Don't want to pay a tax for food service, then prepare and dine on your own, by your own hand. The only folks that I would think should be an exception to the 25% rule, would be public employee's, for them, something closer to 35% should be considered. Don't want to pay an additional 10% in sales tax. Then don't be a public employee.

See, Seabiscuit, see just how easy it could be to solve the PERS problem.
10:09 am - Wed, April 17 2013
happy slap said:
Don,

The PERS people currently demand only an 8% return on their money. Why not grant them that extra 2%?
10:32 am - Wed, April 17 2013
Seabiscuit said:
happy slap, I think you may have dialed a wrong number.

PERS discussion is here:
http://www.newsregister.com/article?articleTitle=panel-backs-democratic-proposal-for-pension-cuts--1365197488--7246--

I do find the idea of an extra 10% for public employee's rather intriguing. Since they are paid with tax payer (our) money, just who do you think would be paying that extra 10%?

How is Washington States 5% sales tax doing?
01:05 pm - Wed, April 17 2013
happy slap said:
If there were no personal income, nor corporate income, nor property taxes levied, the sales tax would need pay for everything drawn/paid for, by and from those 3 currently. All taxes such as fuel and special 'sin' taxes would continue. Mandating that the PERS people pay an additional 10% sales tax would allow for themselves to keep their own retirement plans solvent.

In effect, SEIU workers would be funding/paying into their own retirement plan, every time they made a purchase. Think corrective orthodontics as might be applied to a vampire, in effect, altering one of it's fangs in such a manner as to force it to drawn half of it's sustenance from out of it's own jugular. Like how it's done in the private sector.

Beings how vampires go on forever, those members drawing from the system, would continue to pay into the system that they themselves had created. I dunno, perhaps 'spawned' would be a better descriptor, than created.

WARNING: I may have to change my username, after having Norton Safe Searched it. I think it may have been inappropriate choice.

06:28 pm - Wed, April 17 2013
troy prouty said:
Washington has a sales tax and property tax but no income tax.. It's expensive to many people, but even worse it tends to fail when recession hits. Currently it is extremely short for budget. I think you really need to diversify.. have more taxes in three areas , but less in each so you will always have money coming in from different angles.. People visting, people working here and people living here.

troy*
08:47 am - Thu, April 18 2013
Don Dix said:
A sales tax for goods is one thing, not necessarily a good thing, but a tax on services? So the appliance repair men, the electricians, the concrete specialists, the landscape guys, the painters, the maids, the garbage pickup, the gravel company, the doctors and dentists, the exterminators, locksmiths, auto mechanics -- every dollar spent will be taxed.

And don't expect to see much relief of the taxes we now pay. Oregon's government is addicted to money, and the idea is to keep 'adding to the pile', not 'replace' or 'spread' the income.

Another way to understand -- your taxes will increase if the unions and their puppets (Demos) in the legislature have their way. M66 and M67 were said to be the fix -- not even close (according to the beneficiaries of the tax). This is just another money grab, and as long as the unions have the Demos in their pants, the trend will continue.
09:35 am - Thu, April 18 2013
Seabiscuit said:
I'm probably over simplifying this but;
They lie and within 10 years that 5% will be 10% and any (if there is any at all) property tax relief will be removed and probably added to. The local cities and counties will be allowed to add on a couple of percentage points for themselves and...................
All one has to do is take a look at the sales, vehicle and property tax history in Washington state.

A famous author once said, "In the first place God made idiots. That was just for practice. Then he made the school board." Well, my modification would be to remove school board and replace it with: "............elected officials.”

I have now donned my flame resistant suit!
03:13 pm - Thu, April 18 2013
Fletch said:
It seems to me that there should be some spending reform along with the tax reform. I'm not very hip to all of this goverment process but I am paying attention now.
I know some folks on public assistance who are self employed but only generate to their limit and then turn away work so they can keep their goverment assistance. It something that has been stuck in my craw for quite sometime. I wish there was some sort of a audit type system to keep this from happening. I mean it's a trend that forms a pattern and should be detectable.
The rising cost of prisons Is direct result of to much goverment. Getting rid of the war on drugs would lower prison cost for sure. Measure 57 is probably a factor in this also.
http://www.politifact.com/oregon/statements/2012/aug/03/steve-doell/are-about-seven-10-oregons-inmates-prison-violent-/
05:19 pm - Thu, April 18 2013
troy prouty said:
posted "tax on services"

You already have some. you have it in phone service, cable service for example.. (if it is called a tax).. It was used to pay cable companies to put in fiber optic lines.. I think what they are speaking about is things like eating out etc..etc.. There are many facets to it and it adds up. "yes" I'm for it, but it would needs to be a small %.. and at the same time a reduction of income tax to make it work.

I also believe that government could do a much better job controlling their cost, but facts are the bigger you are the more inefficient you become.

troy*
08:25 am - Fri, April 19 2013
Don Dix said:
Something new!

The legislature is attempting to add another 25 cents to the liquor tax.

4 years ago tax-and-spend-Ted asked his Demo-controlled legislature to raise the liquor tax 50 cents (to fill a projected revenue decline). Naturally they obliged. Note that the retailers did not receive any of this tax, in any way, and the tax was to sunset in June of this year.

When asked why the 50 cent tax would be extended, as well as another 25 cents, House budget chief, Peter Buckley, D Ashland, said "It helps pay for the public health costs associated with alcohol. The whole budget is put together by a lot of people giving a little bit." (as he snickered to himself, I sure)

Does he really think Oregonians will believe his B.S.? If this is designated to help those who struggle with alcohol issues, why does the money go into the general fund Pete? Duh!

Plain and simple, this is another total money grab. The liquor retailers have not received a raise for over a decade, but that cannot be said of the union employees throughout the state system. Salary and benefit raises are consistent and yearly for PERS.

It doesn't take a genius to figure where this 'new money' will find a home -- and I'm sure the PERS people appreciate the bump.

This crop of politicians will promise anything to get elected, but when it comes to actually representing the people of Oregon, they just crawl right back under the sheets with the pimps that own them.



05:29 am - Wed, April 24 2013
troy prouty said:
posted "Does he really think Oregonians will believe his B.S.? "

Well most people vote Republican or Democrat year after year.. so "yes" I guess they must in a sort of mixed up monopoly way. wink.. It's like Dish verse Cable... in Politics.

troy*
08:05 am - Thu, April 25 2013
Don Dix said:
I agree troy, but Buckley says it like it's commonplace for all 'designated money' to be put in the general fund. And he knows full well that it will disappear without a trace, never reaching the supposed target.

In a related area, the House didn't get the votes the speaker promised to pass another tax hike. Speaker Tina Kotek complained that 'some people didn't keep their promises'. Of course, Ms. Kotek has never made any unkept promises, being a fine, upstanding politician, and all. Sounds like another arrival of the Demo Waaambulance!

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