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A sales tax could cost Oregon jobs

Steve BucksteinQuickPoint!

Oregonians have nixed a sales tax nine times at the ballot box, yet at the December 9th Oregon Leadership Summit in Portland some business and political leaders were getting ready to try again. They proposed reducing state income taxes in return for a new sales tax.

Governor-elect Kulongoski and other leaders said state government must first try to cut costs, become more efficient, and earn Oregonians trust again before voters will give it a new tax source.

Not heard at the Summit was a third view: if government cut costs, and became more efficient and trustworthy by sticking to its proper functions, there would be no need for new taxes. In fact, taxes could be reduced.

Those who support a sales tax should know that it would likely worsen Oregon’s already high unemployment rate. In 1993, Cascade Policy Institute released a report, The Economic Impact of an Oregon Sales Tax, which explained that because Oregon is the only Northwest state without a sales tax, we enjoy substantial cross-border retail sales to residents of neighboring states. The sales tax on the ballot that November could have cost Oregon 16,000 to 32, 000 retail sales jobs. The tax lost three to one.

Rather than talk of adding taxes, our time would be better spent finding ways to reduce the size and scope of government so that taxes can be cut and Oregonians’ take home pay can increase.

Steve Buckstein is senior policy analyst at Cascade Policy Institute, a Portland, Oregon based think tank.

© 2006, Cascade Policy Institute. All rights reserved. Permission to reprint in whole or in part is hereby granted, provided the author and Cascade Policy Institute are cited. Contact Cascade at (503) 242-0900 to arrange print or broadcast interviews on this topic. For more topics visit the QuickPoint! archive.

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