Addressing the Regressivity of Sales Taxes

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Addressing the Regressivity of Sales Taxes

InsideCapitolDome
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.

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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More about: eitcpersonal income tax

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Written by staff at the Oregon Center for Public Policy.

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