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This page contains a single entry from the blog posted on February 5, 2011 2:14 PM. The previous post in this blog was It's just a click away. The next post in this blog is The obvious questions. Many more can be found on the main index page or by looking through the archives.

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Saturday, February 5, 2011

Soak the poor: Cogen wants a sales tax

Multnomah County Chair Jeff Cogen soiled his progressive credentials yesterday calling for a sales tax. Sales taxes are often said to be unfair to the poor, since rich and poor pay the same tax rate without regard to their ability to pay. Progressive-rate income taxes are said to be fairer, in that the more able to pay the taxpayer is, the higher the rate of tax that is imposed.

Of course, Oregon's income tax is not model of progressivity, with taxpayers marching up to the 9% level at a mere $7,650 of taxable income (twice that on a joint return of a married couple). But putting a sales tax on top of that would make the system even less progressive.

Speaking of sales taxes, here's a study showing the sales tax rates across the country. Washington State is fifth-highest; Oregon is one of four states down at the bottom with zero.

Comments (41)

Kitzhaber wants one too. There is nothing progressive about these Democrats.

Perhaps if Mr Cogen were to commit himself to removing inequities from the county's property tax assessments, he might discover the resources needed to restore the county's solvency.

nikkibong, Mr Kitzhaber has never aspired to be other than a conservative Democrat.

exactly right, gardiner. i never understood why my Ultra-Lefty inner SE portland neighborhood was festooned with Kitzhaber signs last fall. the guy simply sees working people as pumps to be primed. was it simply uninformed Robo-Dem stupidity that led my neighbors to kitz-gasms?

http://www.jeffcogen.com/about/

Jeff’s advocacy for the well-being of local families led him to the Multnomah Commission on Children and Families, where he served as communications director.

Advocacy for the well-being of local families doesn't match supporting a sales tax. Unless so broke by all these URA's and pet projects that there is no way out now except to get more and more money from the people, however they can.

He moved to Portland in 1992. Where did he live before he moved here? Did he come from a state that had sales tax?

Well, not being an Oregonian my comments are probably irrelevant, but if I used that criteria I would not be able to speak at all about anything.

From the outside, here what it looks like.

1. Apparently the Oregon Income Tax is for all practical purposes a flat tax, and a pretty high one. I assume this is partly due to the lack of a sales tax.

2. One argument in favor of a sales tax is that it exports some to the tax burden to out-of-state residents when they buy things while in Oregon. Since Oregonians pay part of other state's sales tax when they are in those jurisdictions, this is a way to get back some of that money from those in the other states who are benefiting from your residents.

3. A sales tax can be made fairer with certain provisions. Food can be exempted (in NC where I reside the sales tax on food is 2%, on regular goods it is 7.75%). Other provisions, such as reduced or eliminated sales tax on essentials can also work to make the tax fairer. A sales tax on auto's for example might be pretty progressive, since the tax paid on a used car would be a lot less than the tax paid on a Mercedes.

4. If the use of the proceeds is to make the Income Tax more progressive, then the entire state tax burden might become more progressive even with a sales tax that is not particularly progressive.

And don't forget that Cogen is the public face of the school district's property tax measures.

Sid: The problem with the food exemption is that organic grass-fed filet mignon from Whole Foods gets the same tax break that ground beef in the discount bin at Freddy's gets.

Smoke screen alert!!!!

A sales tax is DOA.

But it will serve as a noisy distraction from the raid with new/higher fees, transfer taxes and other sources.

And when they back off the sales tax they can appear compromising.

I don't know how accurate the sales tax rankings are. I just paid 10 percent on a purchase at Starbucks in the Seattle airport. That's more than the chart shows. If you ranked income, Oregon would probably be number 2 on the list - second only to NYC.

I know it's spitting in the wind, but a sales tax would push some of the burden for funding state services onto tourists and renters instead of focusing solely on earners and property owners. I'm not sayin', I'm just sayin'...

Sid...

Your point 2 is nullified by merchants in states which have sales taxes offering discounts to buyers resident in non-sales tax states.

Your point 3 is indeed true and is usually offered to 'sell' the tax to voters. Once passed, those items eventually tend to end up back on the items taxed. Also, once in, a politician can promise to 'get rid of the 2% sales tax' and live up to that by replacing it with a 3.5% sales tax...and on and on.

What is needed is not a tax on consumption, but a steep progressive tax on wealth. Like really severe death taxes and taxes on CEO salary disparities, interest earnings, and offshore investments. Close a few tax sphincters for those in the top 5% of wealth holders and income earners...

Cogen is yuck! Has been from day one. He talks about budget cuts as justifying impostion of a sales tax. But I suspect if you look at actual expenditures by the county they have been increasing throughout the past ten years. I am going to track down whether this is true or not, and call him on it.

Cogen is the same nutcase who gave the Sheriff a blank check so he could run up overtime for his troops while on the Horman case. This is the same guy who decides to spend a million dollars on a few solar panels, cuting a few thousand off the County buildings annual electricity bill. This is the same guy whose county government shuts down little girls selling lemonade.

The real problem here is a County leadership who is more willing to close down business than to foster it. Hence, the local economy suffers from such green shirted nazis.

The County's share of property taxes has been growing over three percent per year for the last ten or more years. Sounds like a lack fiscal discipline so typical of a former Portland cityhall staffer (that being Cogen).

Well, that would give us a punitive tax system, certainly, if not a "progressive" one, but wouldn't raise significantly more money. Oregon simply doesn't have enough people who make/have enough and we have many even fewer of them now after the reaction to Measures 66 & 67.

The sales tax proponents who say "let's tax the visitors" don't mention that purchases by out-of-staters account for maybe 2% of retail sales in Oregon: i.e., 98% of the burden of a sales tax falls on Oregonians. A property tax places a higher relative burden on Oregon's out-of-staters than a sales tax does.

Why doesn't Multnomah County just postpone the Sellwood Bridge another 10 years and use their new vehicle registration fee for the general fund?

I'm quite certain they have PR people who could make it sound smart.

Jim - I believe my former landlady who still owns a lot of apartment buildings in Portland would quite disagree with you about renters and taxes. Part of her justification for increasing our rents back in the day was that her property taxes had gone up and our rent needed to cover it. And if you thought for a second or so about a feasible business budget for rental property you'd know that income needs to exceed expenses and property taxes are one of the expenses. I've actually done that kind of budget math and it did not pencil out on a property I was interested in buying about 10 years ago.

I have studied this question for a long time, and have concluded that the concern for the poor in liberal sectors is a lot like the busty babes who used to adorn sailing ships ... Appealing in a way but not the real goods by any means.

People who protest the imposition of a sales tax somehow never manage to say boo about the payroll Tax, the most regressive tax of all, which starts at the first dollar but stops somewhere north of $108,000 or so ... In other words, thE well-to-do enjoy a tax cut right as they break into the ranks of the well-to-do.

A sales tax not only gets tourists but, even more important, collects a few of the dollars that cycle through the informal economy, as it's called, which is probably much larger than our tourism share.

And of course, by our reliance On income tax, we are taxing ... Discouraging, in other words, exactly what we Claim to want from our economy: jobs and investmentS. By not having a sales tax, we reward consumption over savings.

The liberal tears shed for the poor over the sales tax help the poor not one bit. But Oregon is dominated by cloudy thinking on Economic issues, where the liberals reliably line up in support of policies that hurt the poor, while constantly justifying those same policies as helping the poor. And anti racers of all stripes are only too happy to let the liberals be in the vanguard on this.

No, no. Can't do that. Need to do a complete overhaul of the statewide tax system. I don't think folks in The Dalles want to pay sales taxes for folks in the metropolitan region. So, you need to look at the primary pop. of counties, Mult, Wash & Clack and get down to brass tacks. Does anyone have the guts to do that? Do a statewide assessment? Why should folks in...Banks pay for CRC...It is taxes upon taxes upon taxes people. Time to take a look at EVERYTHING. Kulongowski should have done this, he didn't. Kitz should, we don't know. It is time to grab the bull by the horns people.

The Sales Tax Lesson One:

Income taxes are "fairer" but total collections tend to go WAY up when the economy is doing well and WAY down when the economy is doing not so well. In other words government is receiving lots of money when they least need it. And not "enough" money when they most need it.

Sales taxes are less "fair", at least in the progressive sense, but the total amount collected tends go up moderately when the eoconomy is doing well , but goes down only moderately when the economy is doing less well. Thus when government most needs the money the total income of the government goes up and down more moderately.

The result is that goverment excesses are moderated and government cutbacks are more contained.

Ya takes yur money and you makes yur choice.

Stuart: I don't know how accurate the sales tax rankings are. I just paid 10 percent on a purchase at Starbucks in the Seattle airport.

Just like property taxes can vary from county to county, so can sales taxes. The Washington State Sales Tax rate is 6.5%.

Using your example of the Starbucks located at Seattle-Tacoma International Airport, your sales tax is:

State: 6.5%
City/County: 3% (This includes a sales tax for King County Metro and Sound Transit)
King County Food & Beverage: 0.5%

Thus, your 10% sales tax rate at Starbucks.

An interesting comparison between Oregon (income tax, no sales tax) and Washington (sales tax, no income tax):

Oregon's Department of Revenue budget is just over $182 million, and has 968.22 full-time-equivalent employees in the department. Based on Oregon's 2009 population estimate of over 3.8 million, it cost Oregon $47.67 per person to collect revenue and each FTE served 3,949 people.

Washington's Department of Revenue budget is only slightly higher at $201 million, and has 1,061.9 FTE. Based on Washington's 2009 population estimate of nearly 6.7 million (almost twice that of Oregon), it cost Washington only $30.19 to collect sales taxes, and each FTE served 6,279 people.

So...maybe it might not be such a bad idea to go with a sales tax - provided that the income tax is killed at the same time, as the sales tax appears to be cheaper to administer.

Personally, I'd have no problem with a three-tier tax system provided that each of the three tiers's revenue was restricted, and that there was absolutely, positively no way the Governor or the Legislature could touch it. Of course, we know how much Salem loves to ignore the citizens, so my idea simply would not work in Oregon.

(I would dedicate the income tax to education, on the theory that those who earn more likely benefited from the education system more, and the income tax rate would be between 5-10%. The sales tax would be used for general state government but could not be used for education, nor any other purpose that has a dedicated funding stream, such as transportation or local governments which have property taxes. Again, since our state would mess with it, I wouldn't support it here.)

Before people start pounding the pavement for a sales tax they might try asking who is benefiting from the government services.

I'm not going to go find the figures tonight but as i recall the private colleges and universities in Oregon do a better job of educating people from the lower income group than the state run schools do.

You may also want to look at the routes run by Trimet. Do they tend to serve the better off or the poor?

What about the school system. Ask yourself what economic groups are getting the best teachers?

Who is more likely to get busted for drugs in Oregon? Low income people or the well to do, and what is the drug use like between these groups?

People who protest the imposition of a sales tax somehow never manage to say boo about the payroll Tax, the most regressive tax of all, which starts at the first dollar but stops somewhere north of $108,000 or so ...

Uh... which people are these? Can I see your survey results? I oppose sales taxes, and I'll gladly speak against the inequity of the payroll tax, especially inasmuch as it can itself, I believe, account for the underfunding of social security.

Nope, you can't add a sales tax without a complete redo of our tax system. Do people not get this? And, it would hurt our tourist industry btw, they come here because there is no sales tax! Or at least, it's an incentive to come and spend money.

How about uniformly enforcing ANY tax? One of the reasons we have high taxes is because some pay little or no tax which shifts the burdens to others.

Case in point: Right now the amount of money government gets in taxes is not determined by the sum total of taxes paid.

Meaning: If a big taxpayer (like a business) moves out of the area government doesn't get less money. Taxes go up on the other taxpayers to make up for the money government lost from this one big taxpayer. Government does not get less money.

Just like I thought. Any talk about a sales tax is a distraction.

- Income Tax Increase (HB 2544)
- Property Tax Increase (SJR 9)
- Homes Sales Tax (Hb2518)
- Regional Government Tax (HB 2534)
- Payroll Tax (HB 3630)
- Tourism Tax Expansion (SB 542)
- Kicker Tax Refund Raid (HB 2221)
- Tobacco Tax Increase (HB 2231)
- Soda Tax (HB 2644)
- Car Rental Tax (HB 2545)
- Reduces Income Tax credits (HB 2567)

"Case in point: Right now the amount of money government gets in taxes is not determined by the sum total of taxes paid.

Meaning: If a big taxpayer (like a business) moves out of the area government doesn't get less money. Taxes go up on the other taxpayers to make up for the money government lost from this one big taxpayer. Government does not get less money."

Cite for this, please? I believe the statement is completly disconnected from the reality of Oregon's fixed rate income tax and rate-based property tax which do not operate in this manner. If this were true, there would be no fluctuations in revenue, right? You can't simply make up your own "facts."

Having lived (permanently or for short periods in a number of jurisdictions with sales taxes), let's lay out a few things.

In the 1960s in NY, groceries were not subject to sales tax but some things sold in grocery stores were taxed. MA did not tax groceries in the 70s nor did they tax tea sold in gift shops (I have a funny story on that). Low end dining also was not taxed in NY until 1971, when the infamous "hot dog tax" was placed into effect.

MA also did not tax clothes purchases under a certain amount ($50 at one time). I still remember buying a suit for graduation. Since the items were tagged separately, the clerk rang them as separate transactions to keep me from paying taxes.

The worst place I can remember for taxes was Chicago. In 1979, I had a short term assignment and lived there for 9 weeks. They taxed a quart of milk. I was shocked. Their restaurant tax at the time was very high too.

So if liberals are serious about not making this a regressive tax, then setting up the right kinds of exemptions will need to be done.

Meanwhile as a cautionary warning, if states can levy sales taxes, so can counties, and cities. So for those of living in Multnomah County and Portland, prepare to empty your pockets.. or move.

I remember when the New Jersey sales tax came in, in the '60s. Low rate, many exemptions, all proceeds for education. Over the years, however, it became none of the above.

Ben and Eric H are right.
I have voted against a sales tax so many times I can't remember(7 or 8). They bring this out about every 5-7 years. Too many of us remember California added a 2% sales tax to create the "3-legged tax stool". Until the baby boomers are gone Oregon will not have a sales tax and Washington will not have an income tax. The quote of Tom McCall when he supporterd a sales tax that went down 75%-25%; "I sadly mis-judged the mood of the people"

NOTE: It is doable if in the constitution so the legislature can't mess with it.

We already have a sales tax on rental cars and lodging. They won't get as much from tourists as they think.

The rental car and lodging sales tax for the next 20-plus years has already been spent -- on the Civic Stadium renovation that we have already ripped out.

In western North Carolina where I live the county commissioners just put a .25% increase in the sales tax on the November ballot. It is expected to pass!

Why? Because the funds will be dedicated to capital facilities at the local 2 year community college/technical institute. This institution trains workers and attracts industry and jobs, and it is clear to even some of the anti-tax people that the benefits are greater than the costs.

You cannot have a tax discussion without a spending discussion. Well, you can, if you live in a universe where government services are free, deficits don't matter and everyone is above average.

A sales tax is not doable because at least 75% of the Democrats in the legislature would insist that adopting a sales tax result in a sizeable net tax increase. Of course with all of the usual assurances that it does not.

Remember, Peter Courtney said, "I don't know what else to do but raise taxes"?

His brief honesty would not resurface if any real move for a sales tax surfaces.

Tax the crap out of infant formula. Then maybe the hospitals will stop giving it out for free, and it might give some women pause before deducting a goodly number of IQ points from their children by bottlefeeding them.

Also, seriously over-tax all the addicts and compulsives. People don't have any sense of restraint with certain compulsions, and there's no good reason not to take advantage of this fact. Legalize the addict's drugs and tax them. Tax guns. Tax Hummers, and all the Goliath quadruple-wheelers and any flashy motorcycles. Tax alcohol ferociously.
Porn? That's a tax goldmine. Prostitution? Legalize it and tax the crap out of it. Tattoos and piercings? (Punching various metal objects into all imaginable corners of the human body is an activity that should DEFINITELY be taxed. The idiots who want to pay for that insanity want to pay taxes for it too, rest assured. Fake nails, elaborate waxing routines, perms, dye jobs, veneered teeth, you name it, all the people who yearn for such services want to pay taxes on them, too.

Ben rattled off 11 new proposed tax increases by Kitzhaber and the new legislature. And there are probably more.

I thought Kitzhaber and many of the legislature candidate winners campaigned on fiscal restraint, less taxes, restrained government and finding government cost savings. I must have been dreaming.

Gee, Gaye, why not tax hospital and/or mid-wive deliveries? If people would just quit having kids, then government would not need to provide so many services.

As for the rest of you, this is my advocacy role at work so chill.....

'Bleeding-heart so-called progressive politicians feigning concern for the destitute and improvident as victims of the regressivity of a sales tax."

Yeah, well, poor people are the largest MAJORITY of likely voters. Successful politicians DO show concern, and respect.

State income tax rates on individuals HAVE steepened quickly, from 6% to 9%-plus, in a bracket span of about $5ooo.
State income tax rates on businesses, however, have FALLEN flatline, from a time when they parallelled Individual rates with a 6-to-9% scaling, now DOWN TO barely 6% and in essence NO cap on that beginning bracket top-end for businesses.
In the years of parity, total Inc.Tax Revenues were contributed 60/40 as Business/Individual.
Today Revenues contribution is 20/80 as Business/Individual.

I support an across-the-board Oregon 10% Sales Tax, with One Exemption: All retail items under $250,000. Exempted.

Details could be negotiated about 10% sales tax on homes (over $250,000) or vacation 'cabins,' but in most accounts the 10% tax would apply on yachts, private airplanes, Marathon Coaches (RVs), Art paintings or museum sales, high-end furs and jewelry Fashions, racehorses ... did I mention racehorses?, famous-history golf clubs (as Sen. Smith's) and other rare or antique 'million-dollar' Collectibles (comic books?), designer Cars, exotic Wines and Spirits, 4-night 5-day 'fantasy camp' Retreats and Outdoor Adventure experiences, even elective cosmetic surgery definitely 6-figure stuff.

Other than that, any ol' goods or service item that people ordinarily buy for less than $250,000 -- NO sales tax.

Instead of a universal Sales Tax exempting specified 'food medicine school' items at low-end, just do a universal Sales Tax exempting everything below the top-end ... in the Luxury pricelines. (And if the 250K minimum fails to raise needed Revenues, then the Legislature can ratchet it down to a 240K cut-off, or 200K, or anywhere 'above the rim' where the majority of voters never are exposed.)

Better enforcement is the key. I've heard of too many friends of friends of friends saying that, as a mostly cash business, they avoid >50% of their tax burden... or that as a small business that takes relatively large checks (and receives no 1099 MISCs), they simply cash them at the originating bank.

Too, I've had far too many contractors over the years offer me discounts if I pay in all cash. I can understand the desire to avoid credit card processing fees... but I wonder if there is more to it than just that.

Folks like this need to be scrutinized more closely.

The "progressives" have been running Multnomah County for at least 30 years.

And what have they done?

They have a BRAND NEW jail has been empty for 6 years, despite a $61 million tax levy.

The D.A. says he can't afford to prosecute most misdemeanors, and most felonies are plea-bargained. I.D. theft and drug abuse are rampant: even repeat offenders rarely serve jail time. We have the most expensive incarceration expenses than ANY other large city in the West, except L.A.

Unemployment in MultCo is higher; while our infrastructure (County Courthouse, roads, and bridges) that MultCo is charged with maintaining are crumbling. Virtually every bond issue that makes it on the ballot is approved (including a three year income tax), but there's never enough money.

Giving MultCo more money is like giving a $20 bill to a heroin addict: it's not going to help them get better.

No need to worry folks. Cogen thinks he will be the next CoP mayor.


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Mercedes Eguren, Cabernet Sauvignon 2009
Lorelle, Columbia Valley Cabernet 2011
Purple Moon, Merlot 2011
Purple Moon, Chardonnnay 2011
Horse Heaven Hills, Cabernet 2010
Lorelle, Horse Heaven Hills Pinot Grigio 2011
Avignonesi, Montepulciano 2004
Lorelle, Willamette Valley Pinot Noir 2011
Villa Antinori, Toscana 2007
Mercedes Eguren, Cabernet Sauvignon 2009
Lorelle, Columbia Valley Cabernet 2011
Purple Moon, Merlot 2011
Purple Moon, Chardonnnay 2011
Abacela, Vintner's Blend No. 12
Opula Red Blend 2010
Liberte, Pinot Noir 2010
Chateau Ste. Michelle, Indian Wells Red Blend 2010
Woodbridge, Chardonnay 2011
King Estate, Pinot Noir 2011
Famille Perrin, Cotes du Rhone Villages 2010
Columbia Crest, Les Chevaux Red 2010
14 Hands, Hot to Trot White Blend

The Occasional Book

Phil Stanford - White House Call Girl
John Kaplan & Jon R. Waltz - The Trial of Jack Ruby
Kent Haruf - Eventide
David Halberstam - Summer of '49
Norman Mailer - The Naked and the Dead
Maria Dermoȗt - The Ten Thousand Things
William Faulkner - As I Lay Dying
Markus Zusak - The Book Thief
Christopher Buckley - Thank You for Smoking
William Shakespeare - Othello
Joseph Conrad - Heart of Darkness
Bill Bryson - A Short History of Nearly Everything
Cheryl Strayed - Tiny Beautiful Things
Sara Varon - Bake Sale
Stephen King - 11/22/63
Paul Goldstein - Errors and Omissions
Mark Twain - A Connecticut Yankee in King Arthur's Court
Steve Martin - Born Standing Up: A Comic's Life
Beverly Cleary - A Girl from Yamhill, a Memoir
Kent Haruf - Plainsong
Hope Larson - A Wrinkle in Time, the Graphic Novel
Rudyard Kipling - Kim
Peter Ames Carlin - Bruce
Fran Cannon Slayton - When the Whistle Blows
Neil Young - Waging Heavy Peace
Mark Bego - Aretha Franklin, the Queen of Soul (2012 ed.)
Jenny Lawson - Let's Pretend This Never Happened
J.D. Salinger - Franny and Zooey
Charles Dickens - A Christmas Carol
Timothy Egan - The Big Burn
Deborah Eisenberg - Transactions in a Foreign Currency
Kurt Vonnegut Jr. - Slaughterhouse Five
Kathryn Lance - Pandora's Genes
Cheryl Strayed - Wild
Fyodor Dostoyevsky - The Brothers Karamazov
Jack London - The House of Pride, and Other Tales of Hawaii
Jack Walker - The Extraordinary Rendition of Vincent Dellamaria
Colum McCann - Let the Great World Spin
Niccolò Machiavelli - The Prince
Harper Lee - To Kill a Mockingbird
Emma McLaughlin & Nicola Kraus - The Nanny Diaries
Brian Selznick - The Invention of Hugo Cabret
Sharon Creech - Walk Two Moons
Keith Richards - Life
F. Sionil Jose - Dusk
Natalie Babbitt - Tuck Everlasting
Justin Halpern - S#*t My Dad Says
Mark Herrmann - The Curmudgeon's Guide to Practicing Law
Barry Glassner - The Gospel of Food
Phil Stanford - The Peyton-Allan Files
Jesse Katz - The Opposite Field
Evelyn Waugh - Brideshead Revisited
J.K. Rowling - Harry Potter and the Sorcerer's Stone
David Sedaris - Holidays on Ice
Donald Miller - A Million Miles in a Thousand Years
Mitch Albom - Have a Little Faith
C.S. Lewis - The Magician's Nephew
F. Scott Fitzgerald - The Great Gatsby
William Shakespeare - A Midsummer Night's Dream
Ivan Doig - Bucking the Sun
Penda Diakité - I Lost My Tooth in Africa
Grace Lin - The Year of the Rat
Oscar Hijuelos - Mr. Ives' Christmas
Madeline L'Engle - A Wrinkle in Time
Steven Hart - The Last Three Miles
David Sedaris - Me Talk Pretty One Day
Karen Armstrong - The Spiral Staircase
Charles Larson - The Portland Murders
Adrian Wojnarowski - The Miracle of St. Anthony
William H. Colby - Long Goodbye
Steven D. Stark - Meet the Beatles
Phil Stanford - Portland Confidential
Rick Moody - Garden State
Jonathan Schwartz - All in Good Time
David Sedaris - Dress Your Family in Corduroy and Denim
Anthony Holden - Big Deal
Robert J. Spitzer - The Spirit of Leadership
James McManus - Positively Fifth Street
Jeff Noon - Vurt

Road Work

Miles run year to date: 315
At this date last year: 168
Total run in 2013: 257
In 2012: 129
In 2011: 113
In 2010: 125
In 2009: 67
In 2008: 28
In 2007: 113
In 2006: 100
In 2005: 149
In 2004: 204
In 2003: 269


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