Sales tax? What do you think?

Kari Chisholm

Yesterday, the legislature started hearings on tax reform. There are two proposals - presumably tied together - that were discussed to kick things off. From the R-G's Saul Hubbard:

One would ask voters to enshrine in Oregon’s constitution a 5 percent sales tax on most goods and services, excluding food and medicine. The other would trim income tax rates across the board, make a targeted cut to capital gains taxes and increase some tax credits available to low- and middle-income Oregonians and businesses. The bills are Senate Joint Resolution 36 and Senate Bill 824, respectively.

Estimates suggest that the combination would do two things: 1) Add $750 million in revenue in every two-year period, mostly via the sales tax to tourists and non-residents. And 2) make the tax system more stable.

And those two goals - more revenue and more stability - are exactly the goals we need out of tax reform.

I am very mindful of what Senator Mark Hass had to say:

Sen. Mark Hass, a Beaver­ton Democrat who co-sponsored SJR 36 and SB 82, said the concepts are not the only tax reform options and may not be the best ones.

But they represent something beyond “small-ball” tax changes that the Legislature has implemented for 90 years and led to a “broken” overall system, he added.

“We need Oregonians to be for something” on tax reform, he said. “Please don’t just say ‘no’ and walk away. Otherwise you’re saying ‘yes’ to what we have now.”

And yet, I can't help but think that any sales tax discussion is doomed to fail - since we've rejected sales taxes nine times before.

So, if you're in favor of a sales tax, how would you craft a sales tax and construct a campaign message in order to pass muster with the voters?

And, if you're opposed to a sales tax, what would be your alternative that would boost revenue and create more budgetary stability?

By Kari Chisholm April 16, 2013