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 3^rd 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 www.fairtax.org/oregon. Inquiries by elected officials encouraged.

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