Replace income tax & other taxes with consumption tax

by Doug LaFeve

State Senators Mark Hass and Ginny Burdick along with State Representative Tobias Read believe it is time for Oregon to add a state sales tax to our revenue mix. You know nailing that 3rd leg to the proverbial “stool”, property taxes, income taxes and now a sales tax.

Senator Hass says “We have to get out of this boom or bust cycle.”  I believe he is referring to the variability in state income tax revenues that take place as Oregon’s economy shrinks or grows.

He certainly is not referring to a boom or bust cycle for state government spending, or the size of state government, or the number of state employees – which are at all-time highs. State spending is $60 billion, $30 billion more now than it was 10 short years ago. I would say they have been in a boom cycle while the rest of us NGO’s (that’s non-governmental entities or private sector taxpayers) flounder in a down economy with continued high unemployment, a dismal jobs market, even with the slight improvements and continued uncertainty about our economic future with all the nonsense going on in Washington DC.

This proposal will fail for 1,871,000,000 reasons. That is the amount taxes will increase in the 2015-17 biennium. Yes that is one billion, eight hundred seventy one million dollars if their proposal is accepted by voters.

Oregon voters have repeatedly voted no to a state sales tax nine different times.  The Hass, Burdick, Reed proposal will make it a record of 10.  Oregon voters will never pass a sales tax that taxes their earnings TWICE, once when earned and again when spent.  Sorry, tax me once my bad, tax me twice – NEVER.

I am not saying Oregon voters will never accept a consumption tax. I am saying it has to be the RIGHT consumption tax. A tax proposal that accomplishes the following goals can be acceptable to the voters of Oregon.

Oregon’s Freedom Fair Tax will do this:

Grow the State economy and jobs by making Oregon a great place to do business in the Pacific Northwest by making Oregon the northwest tax haven.  You do this by eliminating the personal and corporate income taxes along with, capital gains taxes and excise taxes on fuels, utilities, and some consumables such as spirits and tobacco.

Protect our farming heritage and small businesses by eliminating the estate tax entirely. Farmers and business people need to know that they will be able to pass on their family farms/business without payments to the state tax collector.

Protect our property by reducing reliance on property taxes by enacting a flat reduction of 50%.


Provide for economic freedom and fairness:

  • By protecting all Oregon households from paying any consumption tax on the basic necessities of life by refunding in advance, the tax on all expenditures up to the federal poverty level based on household size.  The Oregon Freedom Fair Tax increases disposable income and reduces prices on Oregon made and consumed products and services.
  • Allow individual control, by taxing ONLY NEW GOODS (once) AND SERVICES the only exception being tuition, which would be exempt at all educational levels. Used goods would not be taxed.
  • Business to business transactions would not be taxed.
  • Introduce progressivity into tax structure based on consumption levels, not income levels.
  • Eliminate envy in the formulation of a tax system that is fair and equitable to all citizens.
  • Eliminate the hidden taxation, double taxation, and the corruption inherent in taxing people’s incomes rather than consumption, which in general makes the collection of revenue for the state anonymous.

Provide for revenue neutrality by setting an initial inclusive consumption tax rate that will recover the revenues generated from the current taxes eliminated.  Growth in tax revenues will be achieved by the broadening of the tax base and growth of the Oregon economy.

Provide a broader tax base. The Oregon Freedom Fair Tax broadens the tax base, allowing for a tax rate initially lower than current income tax levels, expected to be 4 to 6 percent inclusive, dependent upon the amount of revenues to be replaced by the consumption tax.  The Oregon Freedom Fair Tax eliminates our dependence upon volatile Federal Adjusted Gross Income (AGI) as our tax base and uses the less volatile Personal Consumption Expenditures (PCE) creates a more reliable budgeting projection.

Oregonians are ready for a state tax system that is SIMPLE, FAIR, AND TRANSPARENT. The Oregon Freedom Fair Tax is a system that eliminates the picking of winners and losers by the legislature, a system that provides individual control of your state tax burden by how you consume, and a system where things are taxed, not incomes.

The Oregon Freedom Fair Tax requires no individual or business tax returns reducing compliance costs. It reduces the number of tax filings by approximately 90%, replacing individual and business income tax filings with consumption tax filings by retailers. It provides a climate for business not present in the northwest – no state income tax, no business & occupation/use taxes.

If you are dis-satisfied with what our State Senators and Representatives are doing in Salem and would like to see the Oregon Freedom Fair Tax come to a vote of the people. Join us in making it a reality.

Contact and join the Oregon FairTax Group at Inquiries by elected officials encouraged.

Doug LaFeve lives in Medford and is the State Director for Americans For Fair Taxation, Oregon FairTax Group.

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Posted by at 05:00 | Posted in State Taxes, Taxes | 149 Comments |Email This Post Email This Post |Print This Post Print This Post
  • Three legged stool to solve our problems?
    Oh, like California & New York!



  • Never happen. Any change like this would just be temporary, and they’d ease back into finding ways to scam more revenue.

  • guest

    Haas and Burdick, junior partners in the progressive blah firm of Bowell and Stool

  • Sorry I didn’t win. They wouldn’t be getting any help from me and they wouldn’t have their favorite son, Tobias Read. Oh well…

  • Leathermouth

    I’d vote for that. I would rather see the property taxes eliminated altogether, but this is the fairest tax I have seen yet. This would get the economy going again, put people back to work and “eliminate” the kicker, which everyone in the legislature is out to get, one way or the other. Look in to it before you automatically reject it.

    • Marvin McConoughey

      Good advice, Leathermouth. I recommend starting with a review of states that currently have a sales tax and determine which of them were unaffected by the recent great recession. California is not far away.

  • DavidAppell

    While Oregon state employment is near its all-time high (81,100 in December 2011), as a percentage of population it is not — and that is the relevant metric.

    That number peaked in 1995, at 2.77 state employees per 100 population. it’s now significantly lower, at 2.26 — an effective decline of 17,000 employees, or 21%.

    It’s not too much to ask for an author to be able to do arithmetic.

    • valley person

      Yeah, but that isn’t merely arithmetic. Its statistical analysis. God forbid these people would do that.

      • Wren

        There are liars, damned liars, and statistics. You are both liars. “effective decline?” GMAFB.

        • DavidAppell

          You think state government should have fewer employees even when the state’s population increases? GMAFB.

          • valley person

            You lost him/her at “think.”

        • valley person

          And there are those who choose to ignore facts that don’t fit their narrative.

  • mike

    There’s too much consumin’ goin’ on out dere!!!!

  • Rupert in Springfield

    A few things:

    >Senator Hass says “We have to get out of this boom or bust cycle.”

    Everyone wants that Senator, if not for the state, then in their own personal finances. Nobody like being laid off or having their hours cut when the economy goes south. Yet we all learn to deal with it and adjust our budgets accordingly. It’s called being an adult. Learn it.

    >I believe he (Sen. Hass) is referring to the variability in state income tax revenues that take place as Oregon’s economy shrinks or grows.

    I believe so as well. Frankly I think that if state revenues did not fall when government did stupid things then there would be absolutely no check at all on their wildest folly.

    >Oregon voters have repeatedly voted no to a state sales tax nine different times.

    Exactly, the reason why being two fold.

    One – Only the frothing mouthed believe Oregonians are taxed too little. So adding a sales tax on top of everything else is going nowhere.

    Two – A sales tax in substitution for the income tax, or a lessening of it has no credibility with people. There simply is no belief that were a sales tax enacted, that all the other taxes would be returned to their previous levels moments after.

    >Grow the State economy and jobs by making Oregon a great place to do business in the Pacific Northwest by making Oregon the northwest tax haven.

    Great idea but going nowhere. Oregon has made its choice repeatedly over the years to be a high tax anti business state. If you run a really big business, or anything to do with bicycles, coffee or solar panels you are welcome here. If not, please leave.

    Oregon is an odd state. A land where yard sales are everywhere and any idiot can figure out that if you charge $20 for your old Grateful Dead LP’s you will likely make nothing, but if you charge $2 you will sell them all. Yet these same people think if you double any given tax you will generate twice the revenue rather than simply cause business and people to locate elsewhere.

    I look at it this way, when Nike’s first move last month on expansion is to ask the governor for a guarantee some wild and zaney tax wont rear its ugly head. that says a hell of a lot about your business climate. When the legislature gets a special session called and Nike gets the exemption, that says even more.

    • DavidAppell

      Of course, it would be easier to “deal with it” if, like every other financial entity, the state didn’t have to give back excess funds every budget cycle — that is, if it could plan for the future, or at least a rainy day. But apparently that is too much for short-sighted OR taxpayers.

      • Rupert in Springfield

        I suppose if the way the state got their money was the same as the way every other financial entity got their money was the same, non compulsory, the comparison would have some legitimacy. Since the state compels payment regardless of their performance or desirability of the service this has always been a poor argument.

        • DavidAppell

          Taxpayers vote for the government they want — haven’t you noticed? Or do you just like not being on the winning side?

          • Alf

            The 47% don’t pay taxes, so don’t call them taxpayers.

          • DavidAppell

            They pay lots of taxes — sales taxes, property taxes, gas taxes, payroll taxes, state income taxes, utility taxes, capital gains taxes, and more.

          • LibsDeserveDeath

            I guess you forgot that Oregonians don’t pay sales taxes. Or that the low income 47% rarely own property or investments of any kind; and thus don’t pay property or capital gains taxes.

          • DavidAppell

            So your complaint is that people who don’t have much money don’t pay many taxes? Is that it?

            In fact, the bottom 50% of US households, by wealth, possess only 1% of total wealth. Top 10%: 75% Top 1%: 35%

            And everyone pays property taxes, either through ownership or through rent. Or do you think landlords forget to include it in their price?

          • valley person

            Among that “low income” 47% are a whole lot of retired people who do in fact own their own homes.

    • valley person

      “Only the frothing mouthed believe Oregonians are taxed too little.”

      And only the completely oblivious living in their little Springfield man cave would forget that Oregonians voted to raise taxes a few years ago, and routinely vote to raise taxes locally for libraries, schools, fire, police, and open space conservation.

      Hello in there Mr oblivious.

  • Marvin McConoughey

    No one can know for each family what constitutes a basic necessity of life. For some, it is a car to get to work. For others, tools to carry out a trade. For still others, baby sitters to enable a family member to engage in a paying job. Still others need to send a family member to college to support other members who are invalid and aged. The two named senators know this, and it is a mark of their cynicism that they gloss over the complicated challenges of determining what is essential.

  • HBguy

    No taxes on dividends, inheritances, corporate profits, or capital gains.

    Like almost all conservative tax proposals, this will broaden the tax base by making the middle income pay more and reducing taxes on the wealthier. Even the poor will pay more.

    Then, to rub salt into the wound, there is tax relief for cigars and fine whiskey.

    Here is the problem the wealthier have right now. The middle class don’t want to cut government programs that benefit them. Like social security and Medicare and pell grant. They have also been lead to believe that their tax rates should never go up. So the wealthier have to come up with some way to increase taxes on the middle class without with stealth.

    I would love to see how this tax proposal effects taxpayers at the various income levels.

    • HBguy

      Darn iPad and big fingers… Tax increases with stealth

    • DavidAppell

      Exactly. Doug LaFeve is a traitor to his people, and should be treated like one.

  • Bob Clark

    It sounds like the “Fair” tax would increase taxation in the aggregate for Oregonians as this article talks of broadening the tax base. Isn’t this the same thing Hass and Burdick are also scheming on doing to Oregonians, growing state and local government already well beyond its current excess. Keep the current tax rates and structure, and roll back regulations to the Clinton presidential era. Providing the certainty of current tax rates and structure while deregulating will induce economic growth, which will pull total state and local tax revenues higher. It isn’t broke (except for excess government size), and so, don’t fix it.

  • Art

    Mark Haas and Ginny Burdick are two of the dimmest bulbs in the Oregon Democrat party. They make Mitch Greenlick look like an intellectual.


    No means no. Our eyes say no. Our mouths say no. Repeatedly, we have told you…… no. No sales tax. It’s time to take away your credit card. You’re cut off. Cold turkey. You can’t handle money. Go back to math class.

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