slides: How Oregon’s Taxes Stack Up

Friday, March 13, 2015

Joanna Evoniuk, GoLocalPDX Contributor

Oregonians have the 16th highest tax burden in the United States, with taxpayers paying $3,861 per capita in state and local taxes, according to the Tax Foundation.

However, when it comes to the various taxes Oregonians pay, the state's ranking is all over the board with some of the highest and lowest taxes in the nation.

Slides Below: How Oregon Stacks Up for Taxes

Oregon has one of the lowest taxes for beer, as well as the lowest cell phone tax of all 50 states. Yet it has the 14th highest state gasoline tax and the second highest sprit tax.

The Beaver State is also well known for its high personal income tax. The state has the third highest in the country, while the state’s collection from the tax ranks sixth.

“High income taxes is found to be a harmful one and penalizes labor,” said Scott Drenkard, an economist and manager of state projects at the Tax Foundation. “Oregon’s is right up there with the top in the country.”

Business Climate

Despite the high income tax, the Tax Foundation ranked Oregon’s business tax climate the 12th best in the nation. No sales tax and a low excise tax played a key role in Oregon’s ranking, keeping burdens for owners low and offsetting the personal income tax.

“Oregon does well in the balancing act,” said Drenkard, who worked on the Business Tax Climate Index, which considered over 100 variables. “In terms of taxes, the cost of operating and living is a little better and there’s one less instrument [with no sales tax].”

Drenkard said a healthy tax climate—both the burden for taxpayers and how well taxes are collected—is important for drawing in businesses and helping them succeed.

“It’s been know for many years—having a better tax structure is correlated with higher economic growth,” Drenkard said.

Although Oregon’s tax codes may be brining in business and economic growth, some are concerned it is taking money away from other parts of the state.

Tax Fairness Oregon lobbies for tax reform and policy in the state. Volunteer Josie Koehne said that although tax breaks for large companies may add economic development, it means a loss of resources for social services, such as education

“We’ve become number one for business, but schools are suffering—cutting days and dropping teachers,” Koehne said. “People who have businesses want to have good schools for their children, but we don’t have many of those any more.”

Koehne said her peers have been lobbying for unified reporting, and greater transparency with larger corporations and tax codes so citizens have a better understanding of where tax dollars are going and who is paying them.

Competitive Tax Codes

Differences between state tax codes is a way policy makers can make improvements to their own, Drenkard said.

When states compete on tax polices to raise funds or draw businesses, it creates guidelines for other states to follow or rework for their own policy.
Drenkard said understanding the diffrences gives taxpayers a better grasp on their state's tax code.

“I hate filing taxes every year—it’s a frustrating experience,” Drenkard said. “But that’s what keeps me motivated to remove challenges for people dealing with it.”

Related Slideshow: How Oregon Stacks Up for Taxes

The Tax Foundation ranked the highest and lowest taxes for each state, with the most recent data aviaiable. The higher the ranking, the more tax is due. Here's some of Oregon's lowest and highest rankings: