Oregon is one of the three best states for fair tax policyi —
We should stay there even as we reform our tax system
Our combined state and local taxes (income, property, and consumption taxes and fees) shine in comparison to states with more regressive taxes. Still, in Oregon the poor pay more of their income in state and local taxes than any other income group: Poorest 20% pays 8.1%; Middle 20% pays 7.6%; Top 1% pays only 6.5%. In evaluating fairness in tax policy, most people agree that the best-off families should pay at a tax rate at least equal to what low- and middle-income families pay. In designing a new tax system, this should be our goal.
It can be done. By themselves, sales taxes are regressive, but as part of a carefully crafted whole, we can remain one of the top three states. That should be Oregon’s goal.
Oregon’s tax fairness goals are actually part of law. Here is Oregon Revised Statue 316.003:
The goals of the Legislative Assembly are to achieve for Oregon’s citizens a tax system which recognizes:
- Fairness and equity as its basic values; and
- That the total tax system should use seven guiding principles as measures by which to evaluate tax proposals.
Those guiding principles are:
- Ability to pay;
- Even distribution;
- The tax system should be equitable where the minimum aspects of a fair system are:
- That it shields genuine subsistence income from taxation;
- That it is not regressive; and
- It imposes approximately the same tax burden on all households earning the same income;
- Adequacy; and
To meet those goals of Oregon’s tax system, any tax must be considered in conjunction with the effects of all other taxes on Oregonians.
Here’s the question for Oregon legislators:
Will you promise that in designing a better tax system, you’ll vote only for those reform proposals that will keep Oregon one of the best three states for tax fairness?
i “Who Pays? A Distributional Analysis of the Tax Systems in All 50 States” by the ITEP (The Institute on Taxation & Economic Policy), the 5th edition, January 2015, finds that Oregon is one of the three best states for fair tax policy.