Sales Tax vs. Income Tax

RoguePundit, down in Southern Oregon, has a fascinating discussion about the two states and their opposing tax systems.

For decades, a number of Oregon's politicians have pressed for a sales tax. The oft-stated reason is that Oregon is too dependent upon its income tax. More recently, the reasoning has been refined to note that a sales tax would smooth the peaks and valleys in revenues that income taxes produce. ...

Meanwhile, many of Washington's liberals have long pressed for an income tax, asserting that it would reduce how regressive their high sales tax is. Knowing that Democratic dominance in Olympia wouldn't translate into approval of an income tax, the Legislature there (including several Republicans) raised lots of other taxes this year. They increased the cigarette tax, liquor tax, gas tax, and vehicle fees, all of which are regressive (though the latter two can be mitigated by use of public transportation...not much solace for the rural poor). The Washington Legislature also reinstated the estate tax.

Tax advocates in both states figure that their tax systems are flawed because they only have two legs of the mythical three-legged tax stool (the third leg being property taxes). Both states have limits on property tax increases that gall tax proponents...so I guess that leg of the stool is stubby.

Read the rest of Admiring Oregon's Income Tax and discuss at RoguePundit.

[Editor's Note: Comments are closed on this topic. We're using this 'elsewhere' feature to point folks to other good stuff in the blogosphere, but we're not interested in grabbing their traffic. Comment over there.]

May 18, 2005 Posted in elsewhere.