Quote:
Originally Posted by Cornerguy1
A couple of different posters have noted the difference between the Oregon income tax rate (9%) and the ever-popular 0% in Washington.
Does Washington have a state sales tax, and, if so, at what rate?
Sales tax applies to purchases made with so-called after tax dollars and, as there are no minimums or deductions to hide behind, I wonder what the bottom line would be when comparing 0% income tax in Washington against 0% sales tax in Oregon?...
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WA state sales tax is 8.4% (with small local variations), OR 0%.
WA tax system is the most regressive (takes the largest percentage from low income households) of any in the US, while OR is relatively progressive (takes less from low income households).
On how well that has worked out, the
Oregon Progress Board answers the question "How does OR compare to WA" with "not favorably".
http://www.oregon.gov/DAS/OPB/2005re...regon_Compares
If you click their
2005 Competitive Index link, you'll get pages of tables comparing OR and WA incomes, unemployment, cost of living, job growth, poverty, and the things those taxes pay for (education, crime, etc) and can see in detail why they reached that overall conclusion.
Part of the problem is that the OR state tax revenue is erratic from year to year, because it lacks the more stable sales tax base. This repeatedly squeezes the state budget. But the bigger problem is that the WA tax system apparently encourages employers, while the OR income tax apparently discourages them. For whatever reason, OR has lagged WA for decades now, and the major difference between them is their tax systems.
(In Canadian terms, OR vs WA is analogous to BC vs AB, and you know that debate well, I suppose!)