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Addressing the Regressivity of Sales Taxes

Hard to Overcome and Made Worse by Income Tax Cuts

One important issue in the discussion over whether to adopt a sales tax in Oregon is who would bear the burden of the tax. A sales tax is inherently regressive; the tax is not based on taxpayers’ ability to pay. Some proponents acknowledge that sales taxes place a heavier tax burden on low-income households than on middle- or upper-income households, but maintain that exempting necessities, such as food, or including low-income credits through the income tax, are sufficient to address the problem.

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