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.

Oregon’s current $3.2 billion revenue shortfall and projected revenue shortfalls over the next few budget periods have prompted discussion of major tax reform. As policy makers address tax reform, they will need to consider who will bear the costs of changes to the tax structure.

The recent decision by House Speaker Karen Minnis to disengage from the bi-partisan budget talks and unravel the joint House and Senate Ways and Means process raised quite a stir in the Capitol. Much of the feuding over Minnis’ move to push her own plan through the Republican-controlled House concerned whether it would slow down budget negotiations or jump-start a stalled process.

Recent federal tax cuts provide Oregon policy makers an opportunity to raise revenue to fund state services. Since the federal tax cuts are heavily tilted toward Oregon’s most affluent households, state income taxes can be raised on those households without increasing their combined federal-state tax burden.

The House and Senate Democrats’ tax plan will “line the pockets of Oregon’s most affluent and threaten Oregon’s long-term fiscal health” according to the Oregon Center for Public Policy. The Silverton-based non-profit research institute is calling the plan “counter-productive and misguided.”

The Oregon Legislature reflects Oregonians. Like their constituents, too many legislators fail to understand and acknowledge the important role government plays in Oregon’s economy and in our daily economic and social life.

Public policy decisions often come down to a matter of priorities. Which spending proposals are more important to fund?