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.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
Now flip that around from an income tax to a 10% sales tax…
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.