A Modest Proposal

Taking political potshots is easy - Oregon and the Feds are producing a very target-rich environment. It's time to be constructive, however, so let's start in Oregon with taxes. 

Oregon's "progressive" income tax is an albatross around the state's neck and it's time to get rid of it. The prevailing mindset in this state is the "rich aren't paying their fair share." Thus, brackets creep up and deductions are slowly vanishing. Of course, the "rich" are loosely defined as anyone who makes more than you do, which ensnares in the tax net a lot of people who aren't exactly the Gates or Buffetts of the world. It isn't by accident that Washington, with no state income tax, has developed a much broader manufacturing base than Oregon. Most recently, Measures 66-67 had a strong punitive as well as revenue raising element to them. They have raised considerably less revenue than had been forecast because many owners of small and medium businesses moved their businesses out of state than have another gouge taken out of their hides. I'm shocked I tell you - shocked! So, what to do?

Abolish the income tax and replace it with a sales tax. A sales tax is a consumption tax. There is no penalty for creativity and the wealth production that goes with it. Also, if a person saves the money they make there is no tax either, which encourages capital formation and investment. This in turn helps fuel the economy by providing loans to new and expanding businesses, which then produce new jobs and wealth. On the other hand, anyone who wants to buy the bling can do so but they will pay the going rate on the sales tax. Bring on the corporate jets and Ferraris! 

The big condition to this change - a Constitutional amendment that kills the income tax D-E-A-D. Politicians always want to have their cake and eat it too, so they would love to have an extra source of cash for their coffers. Fuggedaboutit! This is an either/or proposition. A consumption tax would benefit Oregon if it's rates are reasonable and it is not just dumped on top of the income tax. Do that and we become another New York, New Jersey, or California complete with their awful economic indicators. 

If Oregon wants to begin the road back to economic health, this is a good place to start. Then we can move on to other things like how we spend tax revenues - serious PERS reform, cutting the fat out of the state budget, eliminating the burgeoning Nanny State, and a host of other issues.  Getting a handle on all of these would make Oregon an economic powerhouse that matches its natural beauty.