Firearms and Sales Tax

Let’s assume I get paid 5,000/month straight up, and I’ve got living expenses of 2,500/month, a fun account that gets 1,000/month, and the final 1,500 goes into savings.

Under an Oregon style, 10% income tax with no sales tax, that changes the numbers to:
5,000 gross income
4,500 net after taxes

2,500 life expenses,
1,000 play money
1,000 savings.

Now flip that around from an income tax to a 10% sales tax…
5,000 income
Let’s assume 2/3 living expenses are rent, car loan, etc - untaxed, while 1/3 is gas, supplies, etc (taxed). That works out to:
~1667 non taxed expenses
~917 after tax expenses
1,100 play money after tax
1,316 to savings.

Notice that the difference, in this scenario, is that I would save 316/month more on a 10% sales tax system vs a 10% income tax.

This example is simplistic but highlights my point. I moved here from AZ which has a small income tax and 8.5% sales tax…and I’d take that in a heartbeat over Oregon’s high income tax.
Interesting perspective. Makes sense by all means. My uncle who lives in OR always told me an income tax was the most fair way no matter what, compared to a sales tax. I always thought income taxes take way incentives to work OT etc, since you're going to just get taxed more accordingly.
 
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You know the difference between a libertarian going off on how there should be no taxes and a bible thumper spouting that revelations is upon us from his milk crate in the town square?


nothing. They’re both living in the land of their imagination.

There are only two things in life that are certain: death and taxes.
You speak as a divisive person.

I do like equating taxes to a religion.

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Let’s assume I get paid 5,000/month straight up, and I’ve got living expenses of 2,500/month, a fun account that gets 1,000/month, and the final 1,500 goes into savings.

Under an Oregon style, 10% income tax with no sales tax, that changes the numbers to:
5,000 gross income
4,500 net after taxes

2,500 life expenses,
1,000 play money
1,000 savings.

Now flip that around from an income tax to a 10% sales tax…
5,000 income
Let’s assume 2/3 living expenses are rent, car loan, etc - untaxed, while 1/3 is gas, supplies, etc (taxed). That works out to:
~1667 non taxed expenses
~917 after tax expenses
1,100 play money after tax
1,316 to savings.

Notice that the difference, in this scenario, is that I would save 316/month more on a 10% sales tax system vs a 10% income tax.

This example is simplistic but highlights my point. I moved here from AZ which has a small income tax and 8.5% sales tax…and I’d take that in a heartbeat over Oregon’s high income tax.
Exactly. Or to put it in even simpler terms: When you pay income tax in Oregon, you pay on every dollar you earn. When you pay sales tax in Washington, you only pay on "discretionary" purchases (think cars, clothes, electronics, guns) not "essentials" like food, rent, mortgage. Needless to say, the amount you spend on discretionary purchases will be vastly lower than your total income, perhaps half at the very most. Since the income tax in Oregon and the sales tax in Washington are close to the same (9% or so), it becomes a no-brainer that you will pay much more tax on 100% of your income as an Oregon resident compared to sales tax on, at most, 50% of your income in Washington. And to skew the Washington advantage even more, as the OP indicated people in Clark County pay far less sales tax than the rest of Washington because they shop in Oregon tax free. For retired people in particular with their fixed incomes, it starts to look really stupid if they continue to reside in Oregon paying those uber high taxes compared to just moving across a river.
 

whiskeybill

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Income taxes can be as unpredictable as sales taxes. The last couple of years of Covid induced unemployment have shown that. Unemployed workers are not paying income tax, and spending on goods and services are lower. Government coffers are taking a hit as well.
 
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A benefit of income tax is predictable budget forecasts. It’s much easier for a state to forecast revenue on what it knows people make vs guessing what people might spend.
A simple way to address that is for the state to live within its means like any responsible citizen would do. Any surplus can be invested and held for very limited types of emergencies like natural disasters.
 
Income taxes can be as unpredictable as sales taxes. The last couple of years of Covid induced unemployment have shown that. Unemployed workers are not paying income tax, and spending on goods and services are lower. Government coffers are taking a hit as well.
What’s interesting is WA has seen record sales tax revenue. They didn’t see it coming, so all the employees took furloughs and layoffs and services became understaffed because of unneeded hiring freezes.
 
A simple way to address that is for the state to live within its means like any responsible citizen would do. Any surplus can be invested and held for very limited types of emergencies like natural disasters.
That’s not simple unless you move core services out of the general fund and take the legislatively mandated fluff programs and make them dependent on surplus funds.
 
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How bout property taxes? In Oregon I'm at $4500.00 per year. And Social Security. That's part of the fed tax deduction each paycheck.
And when I go to claim it at retirement it's again taxed.
 

AlwaysOnTheGo

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I prefer a sales tax over an income tax, for the simple fact that I make more than I spend, so I want the smaller amount subject to taxation.

Also, don't forget the difference between your marginal tax rate (the rate people typically recite) vs your effective tax rate (the amount of tax you pay, after deductions and tiered income taxation are taken into account).

Here's a good income calculator that will show you difference, based on your inputs: https://smartasset.com/taxes/oregon-tax-calculator
 
I prefer a sales tax over an income tax, for the simple fact that I make more than I spend, so I want the smaller amount subject to taxation.

Also, don't forget the difference between your marginal tax rate (the rate people typically recite) vs your effective tax rate (the amount of tax you pay, after deductions and tiered income taxation are taken into account).

Here's a good income calculator that will show you difference, based on your inputs: https://smartasset.com/taxes/oregon-tax-calculator
I think the state would do better if they repealed the gas tax and sales tax and came up with a realistic income tax rate.
 
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How bout property taxes? In Oregon I'm at $4500.00 per year. And Social Security. That's part of the fed tax deduction each paycheck.
And when I go to claim it at retirement it's again taxed.
Property tax depends on much more than the state. Local taxes for schools, roads, county, etc. have a huge impact. Especially if you live within the Portland city limits, you'd be amazed at how much excess baggage they load onto property taxes there (not to mention water/sewer charges, which are perhaps the most outrageous in the Pacific Northwest). Live within Portland city limits and, in a word, you'll be paying through the nose, especially compared to non-Portland residents. If you have half a brain and move outside of Portland into the suburbs, then property taxes are closer to Clark County, so that comparison is more or less a wash. However, even where home values and taxes are comparable between Clark County and a Portland suburb, generally speaking you get more bang for your buck on the Clark County side (i.e., more home square footage, more yard square footage), and of course the school districts are usually much better, particularly the Hockinson, Ridgefield, and Camas school districts.

If would be interesting if someone did an actual apples-to-apples comparison of all the taxes, charges, fees, etc. between living in Portland, living in Vancouver, and living in a suburb like Gresham or Tualatin on one side, and Ridgefield or Hockinson on the other. Base it on an average value home, average income, average number cars owned, etc. The whole shebang, including sales tax, income tax, property taxes, utility taxes, phone/911 taxes, vehicle licensing fees, etc. That would be a fairly monumental study.

I will say this. I believe that the tax uniqueness of the Portland-Vancouver dynamic is unmatched anywhere else in America. There are small towns that have the same dynamic, for example Walla Walla and Milton-Freewater, but when it comes to a major metro area I don't believe you'll find another combination of sales tax without income tax on one side, and income tax without sales tax on the other. That combination is unique and, at least from a tax perspective, makes the Vancouver side of the metro area the most attractive tax haven in the United States. Or, it can be a taxing nightmare for the poor slobs who live in Vancouver and must commute every day to Portland, in which case they're paying for one of the highest sales tax rates in the country (Washington) AND the second-highest income tax rate in the country (Oregon). That nightmarish scenario makes absolutely zero sense.
 
You speak as a divisive person.

I do like equating taxes to a religion.

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Well stated! It’s funny watching people duke it out over which tax is better and should be allowed over the other lol

To the debate at hand, even though I am being unconstitutionally forced to do so, when I render unto Caesar in Oregon, it is much more beneficial to have the income tax and no sales tax! Of course, depending on income and spending habits, that is likely not the case for everyone!
 
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Well stated! It’s funny watching people duke it out over which tax is better and should be allowed over the other lol

I especially like the casual dismissal of the Constitution you previously mentioned; as if all of the sudden it doesn’t matter because we’ve already allowed it to be violated! Wait, that sounds like a familiar attitude doesn’t it??

To the debate at hand, even though I am being unconstitutionally forced to do so, when I render unto Caesar in Oregon, it is much more beneficial to have the income tax and no sales tax! Of course, depending on income and spending habits, that is likely not the case for everyone!
Frankly, I find it difficult to imagine any mathematical scenario where living under Oregon's income tax is more attractive than living under Washington's sales tax. It just doesn't make sense that tax on 100% of your income would be more attractive than tax on discretionary purchases, which at MOST might equal 50% of income. You'll really need to explain how you can mathematically justify your statement.
 
Frankly, I find it difficult to imagine any mathematical scenario where living under Oregon's income tax is more attractive than living under Washington's sales tax. It just doesn't make sense that tax on 100% of your income would be more attractive than tax on discretionary purchases, which at MOST might equal 50% of income. You'll really need to explain how you can mathematically justify your statement.
Oregon income is not (or very rarely) 100% taxable, however; there are numerous deductions and other factors that reduce the total income tax burden below your actual gross income.

Now imagine a scenario where my total income tax burden (as a percentage) is half or less than half of your sales tax burden. You would then only need to spend half as much as me on taxable purchases to meet or exceed the same total taxes paid to the state.

This scenario is very much possible, especially when comparing Oregon to Washington. Factor in occasional purchases like a car from a dealer, for example, and I can guarantee there are many Oregonians who have been better served by the lack of sales tax!

Again though, it is all dependent on income bracket and spending habits.

For a more detailed exploration of how the total tax burden can be greater in Washington (compared to Oregon), this study by PSU makes for an interesting read!

 
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Oregon income is not (or very rarely) 100% taxable, however; there are numerous deductions and other factors that reduce the total income tax burden below your actual gross income.

Now imagine a scenario where my total income tax burden (as a percentage) is half or less than half of your sales tax burden. You would then only need to spend half as much as me on taxable purchases to meet or exceed the same total taxes paid to the state.

This scenario is very much possible, especially when comparing Oregon to Washington. Factor in occasional purchases like a car from a dealer, for example, and I can guarantee there are many Oregonians who have been better served by the lack of sales tax!

Again though, it is all dependent on income bracket and spending habits.

For a more detailed exploration of how the total tax burden can be greater in Washington (compared to Oregon), this study by PSU makes for an interesting read!

That's an interesting report and glad you sent it. I saved it for further study. But one of the issues I saw that it presents is the idea that Oregon's income tax is "progressive" meaning it adjusts the rate of tax based on a filer's income level, compared to Washington sales tax that is "regressive" because it is imposed at the same rate regardless of income level. There are at least a couple of challenges with that perspective when it comes to Oregon. First, Oregon's income tax is barely progressive. Putting aside Oregon's very high income tax bracket for very high income filers, the common maximum tax burden for the vast majority of Oregonians is 9%. But that is "barely progressive" since an individual filer reaches that maximum rate after just $7,500 in income. It is not a gradual progression to the maximum rate as would typically be seen in other progressive income tax states. Oregon's is a very sharp spike from minimum to maximum after just $7,500, which by any measure is barely progressive. The other issue to consider is that lower income people pay a much greater portion of their annual income on essentials like food, rent, utilities, childcare, etc., and a far lower percentage of their income on discretionary purchases like electronics, boats, guns, etc. Since Washington's sales tax only applies to discretionary purchases and not essentials, lower income people automatically pay less in sales tax.

The other item to note is that Washington's economy is far more oriented to exports than Oregon's. This is important to recognize because it means Washington is able to export a great portion of tax burden out of state compared to Oregon. To put a fine point on that, the US Department of Treasury receives sales data from Boeing on a weekly basis because its airplane exports have such a large skewing effect on the country's international trade balance. This explains why, if you were to look at the total state taxes collected in Washington on a per-capita basis compared to Oregon, Washington would look much, much higher. The reason for that is largely driven by an excise tax on businesses. Yet that is a false read, because a per-capita comparison would imply the residents of Washington are bearing that tax burden. Not even close. The reality is the business tax burden in Washington is largely exported out of state in the cost of the products sold, and definitely not being paid by Washington residents.

Edit: Just found that Oregon adjusted the 9% threshold for its 2021 individual tax filers from $7,500 to $8,250. I'll leave the original post as is for comparison. Of course, just like the $7,500 threshold, $8,250 does not a progressive tax system make.
 
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That's an interesting report and glad you sent it. I saved it for further study. But one of the issues I saw that it presents is the idea that Oregon's income tax is "progressive" meaning it adjusts the rate of tax based on a filer's income level, compared to Washington sales tax that is "regressive" because it is imposed at the same rate regardless of income level. There are at least a couple of challenges with that perspective when it comes to Oregon. First, Oregon's income tax is barely progressive. Putting aside Oregon's very high income tax bracket for very high income filers, the common maximum tax burden for the vast majority of Oregonians is 9%. But that is "barely progressive" since an individual filer reaches that maximum rate after just $7,500 in income. It is not a gradual progression to the maximum rate as would typically be seen in other progressive income tax states. Oregon's is a very sharp spike from minimum to maximum after just $7,500, which by any measure is barely progressive. The other issue to consider is that lower income people pay a much greater portion of their annual income on essentials like food, rent, utilities, childcare, etc., and a far lower percentage of their income on discretionary purchases like electronics, boats, guns, etc. Since Washington's income tax only applies to discretionary purchases and not essentials, lower income people automatically pay less in sales tax.

The other item to note is that Washington's economy is far more oriented to exports than Oregon's. This is important to recognize because it means Washington is able to export a great portion of tax burden out of state compared to Oregon. To put a fine point on that, the US Department of Treasury receives sales data from Boeing on a weekly basis because its airplane exports have such a large skewing effect on the country's international trade balance. This explains why, if you were to look at the total state taxes collected in Washington on a per-capita basis compared to Oregon, Washington would look much, much higher. The reason for that is largely driven by an excise tax on businesses. Yet that is a false read, because a per-capita comparison would imply the residents of Washington are bearing that tax burden. Not even close. The reality is the business tax burden in Washington is largely exported out of state in the cost of the products sold, and definitely not being paid by Washington residents.

Edit: Just found that Oregon adjusted the 9% threshold for its 2021 individual tax filers from $7,500 to $8,250. I'll leave the original post as is for comparison. Of course, just like the $7,500 threshold, $8,250 does not a progressive tax system make.
That was the next thing I was going to ask, how the income tax brackets are made in OR, as how wide or narrow the brackets are, affects how progressive the taxation is. I think you answered that here lol.
When I was in the service, some people would change their home of record (HOR) to WA, TX, FL etc, where there was no income tax, as some states still screw you on income tax, even if you are not stationed in the US let alone, in your HOR state.
 

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