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Comment by rootusrootus | Hacker News Reader

On the other hand, Oregon is one of the very few states that don't have sales tax. Perhaps they're smarter than you give them credit for.

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That sounds like a very one-sided argument. If you want a functioning government you're going to need money to pay for it, and if you don't have sales tax it means you have to get it elsewhere; it doesn't "make it go away".

If the argument was supposed to be 'a smarter, well-functioning tax system that pays for government facilities' then say that. But such a statement would need some references to back it up.

Sales tax is an abomination. I walk into the store, pick something off the the shelf that says it costs $9.99, but I can't actually buy it for that. Argh.

I understand in some places in Europe (for instance) the price on the shelf is the price including tax. This is not a hard problem to solve.

I think Sales tax for most things is probably the fairest means of taxation. It can be applied equally between the wealthy and the poor. It is applied when you choose to get something, rather than arbitrarily before or after. It tends to be applied evenly whether you're buying a box of chocolates or a flatscreen TV.

It's pretty much only the USA where the prices on the shelves aren't the final price with taxes.

Sales tax (and VAT) is regressive since poor people spend a much larger portion of their income on goods subject to sales tax.

Meh, you could lower taxes on inferior goods and increase them on luxury goods to compensate. Income taxes are pure evil as they are unavoidable and maximally painful. As an Oregonian, federal+state income tax means I don't make any money I get to keep until late April. I think about killing myself every year because of it.

In 1991, a 10% federal luxury tax went into effect. Result: rich people stopped buying yachts and planes. Revenue raised was a rounding error (less than $13 million in a year and a half), luxury industries were decimated, and the tax was repealed 2 years later.

So the lesson learned here that very wealthy people are more interested in not paying taxes than they are in owning their own planes and yachts?

I understand that $2.2 million is more than $2 million, but I find it kind of baffling that people spending that kind of money on that kind of thing are price sensitive.

Yachts and luxury boats yes[0] however it was effective on cars until 2002[1] however they still managed to collect $3.94 billion off the luxury tax by 2000[3]

One could argue that if they had the stones to keep the tax in place, eventually people relent and start purchasing high ticket items again, and it could have compounded to make a significant difference by now

[0]: https://www.baltimoresun.com/news/bs-xpm-1993-10-07-19932801...

[1]: https://archive.is/pTR5E

[3]: https://www.everycrsreport.com/files/20020307_RS20314_f70eb8...

More importantly, sales tax is equally applied to foreign companies. I'm theoretically a fan of sales tax since it's very fair tax, but very unpopular for other reason (bad for economy). I think average people (no way to avoid tax) should support sales tax for fairness. Negative income tax for equality.

The EU has a thing called the clear pricing directive, which mandates all normal taxes be included. (doesn't vibe with laws in 'invitation to treat' countries, but has the same effect)

Still seen pfand deposits charged extra in Germany though.

That has nothing to do with the existence of a sales tax.

That has to do with the merchant not wanting to show a price label inclusive of all taxes.

There could be a law requiring merchants to display a final price, but I have yet to see a jurisdiction in the US with a law like that so I presume it is not a politically popular enough of an issue.

I hate the argument that it would be too hard on the merchant to post proper price tags, there are too many different taxes to account for and so on.

Wait a minute, the register/POS figures it out just fine...

I have never heard of that. The argument is usually if merchant A advertises prices excluding taxes, and merchant B advertises prices including taxes, then merchant B will risk losing out on some customers who go to merchant A because they think buying from merchant A will cost less.

On the internet, taxes are based on shipping address, so there I think it would be impossible for a merchant to show tax inclusive price unless the buyer enters a shipping address first.

The POS figures it out because it likely has a subscription to a sales tax calculation service like Avalara. US sales taxes are frightfully complicated and change constantly, compliance is not optional, and ignorance is no excuse.

Local/state politicians can raise or lower taxes on all sorts of products with conditions attached for fun / electability.

www.accuratetax.com/blog/top-10-weirdest-sales-tax-laws/

It isn't all or nothing. Imagine the government we could have if we all paid 90% in taxes - except I don't want that. I don't even want the kind of government that needs a budget of 40% of my income.

If you live in a rural area, the government needs a budget to repair infra and run a few programs, it doesn't need the budget of NYC. Likewise, a government that lacks a sales tax mechanism doesn't "need to get the money elsewhere", it can simply go without and adjust it's services accordingly.

Well my county raised it's property taxes and now can't spend the money so is offering opt in discounts to those in the know (i.e. the well connected). Completely perverse misappropriation of funds

Sales tax disproportionately impacts the lower class. If I had the choice between no income tax vs no sales tax, I'd take no sales tax.

It only does so if the sales tax itself is regressive. The entire point of excise taxes is to be avoidable through conscious consumption. Heavy sales taxes on luxury goods are better than income taxes because it ensures anyone can avoid them by not spending but also ensures luxury good consumption merits disproportionate societal funding.

Taxing FOOD is always regressive.

No sales tax is awful! Instead of only getting taxed on purchases (WA), you pay 10% of your entire income to the state. It is tragic! And it also means any unreported wages are never taxed. It's pretty much the worst system possible.

Raising state income tax to 10% is not enough to exceed what I pay in sales tax in my state, so such a move would be a net positive for me.

If I were a millionaire, it would be a very different story, and I would end up paying more in taxes. But if I were that rich, a relatively small change in my tax burden wouldn't have any real impact on my lifestyle, so who cares?

I think sales taxes are generally regressive. They disproportionately impact the poor and middle class, who spend a greater percentage of their income on taxable goods and services than the wealthy.

I'm solidly middle class, and the 10% burden is really painful. Remember that is also counts against the $10k salt deduction federally. As it is, I pay well over the salt threshold in income alone, making all property tax unwriteoffable.

The other thing income tax disallows is tax avoidance through nonconsumption. I have to pay it all regardless of how much I consume, which I try to keep low.

It also means that my adjusted wages per hour are lower. Spent 70 hours a week on a pressing project? Congrats, you don't get paid OT so not only is your hourly wage lower, but your taxes per hour are disproportionately higher.

10% appears to be the tax rate for the upper classes. I make $110,000/year and my tax rate would only be 7%, barely up from the 5% I pay in my current state. But I end up paying 8.5% sales tax on just about everything I buy, so at worst it's a wash.

Bracket (Single)/(Couple) | Marginal Tax Rate

$0+/$0+ | 5.00%

$3,550+/$7,100+ | 7.00%

$8,900+/$17,800+ | 9.00%

$125,000+/$250,000+ | 9.90%

The marginal rate is 9% starting at your dollars above $8,900 single or $17,800 married. Yes, I rounded to 10% in my statements. Even low income earners relative to the median are taxed astronomically in Oregon. It is simply not a progressive policy. It is a painful policy at best.

That’s unbelievable to me. If you make around 75000 as a single filer, you’d send about 5800 in income tax in Oregon. Let’s assume we’d have a wildly high sales tax of 10% instead of an income tax: you’d end up having to spend literally all of your take-home earnings on taxable purchases. In other words spending nothing on groceries, rent, or other bills. Just shopping.

Oregon has the highest effective income tax for people earning $75k[1].

[1]: https://www.cnbc.com/2023/02/27/states-with-highest-income-t...

Europe: "Por que no los dos!"

But make it 30%+ instead of 10.

10% was state only. The Federal gov will take another progressive rate that will make my all-in around 33%.

Oregon and WA are exceptions in the US. Most states have both sales and income tax. WA has sales only, and OR has income only. Both have real estate taxes too.

Folks living at the border of those two are said to enjoy the best of two worlds ;)

Vancouver, WA is the United States' greatest tax hack in existence if you can pull it off

It truly is the best existence. Unfortunately I work in Pdx so am not able to pull that hack off. Gotta wait until retirement.

Agreed, I hate saving money! /s

i’d strongly prefer a sales tax to the high income tax, especially given how much tourism we have.

The biggest difference comes down to income. It varies a little year-by-year, but in general Oregon has the least regressive tax regime in the US, while Washington has the most regressive. If you make a lot of money, living in Vancouver can make a real difference.

This would be a good argument if they weren't so bad at allocating the taxes they do collect.

I blame that on the politicians. Hell, Oregon politicians like to just walk out of the legislature when they think they lack popular support.

Oregon has sales tax on alcohol, cannabis, tobacco, hotel rooms, gasoline, rental cars, new car purchase, etc.

We don't have sales tax here in Montana either, but I'm not sure how "smart" it is, since it basically means richer people pay less and less rich people pay more.

Generally it's the other way around -- sales tax is strongly regressive. In fact, Oregon is usually just about the least regressive tax state in the US, and Washington is just about the most regressive. All because of sales tax vs progressive income tax.

I understand sales tax is in theory regressive, but this seems wrong/naive upon scrutiny because you would assume higher earners consume more than low earners, thus contribute more sales tax in absolute terms, if not quite in relative terms.

They have state income tax so I guess that offsets that....

Yep, the state still has to have some kind of tax base. Oregon ranks right in the middle, usually 24-26th amongst all 50 states in terms of total tax burden. But we are usually the least regressive (or close). As opposed to Washington, right across the river, who is frequently most regressive.

They can get very creative when it comes to taxes

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