For decades, Oregon has resisted calls to replace some of its income taxes with a sales tax. Now, that idea is back — with Governor Tina Kotek’s Prosperity Council calling for an overhaul of Oregon’s tax code that could mean lower income tax rates and the establishment of a sales tax.
What happens when states follow that path? In this episode of Policy for the People, we look at what’s happened in states that have cut income taxes while increasing their reliance on sales taxes. The results are striking: tax systems have become more regressive, shifting more of the burden onto working families.
We hear from analyst Sarah Austin of the Institute on Taxation and Economic Policy about the national trend, and from Alexandra Sirota of the North Carolina Budget and Tax Center about her state’s decade-long experiment with cutting personal income and corporate income taxes. North Carolina has ranked among the nation’s top states for business — but its tax cuts have failed to deliver the promised economic boom and have contributed to growing fiscal challenges and underfunded public services.
As Oregon considers changes to its tax system, the question is simple: Will Oregon follow North Carolina’s path, or instead choose the path that asks more from those who can most afford to pay?
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