Tax pollution, not sales

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Some commentators, including a conservative columnist in these pages, have suggested that we should adopt a sales tax in Oregon to provide a so-called "stable source of funding" for our schools and for other statewide programs.

This is a very bad idea. We all recall that Oregon voters have on several occasions rejected ballot measures proposing a sales tax, but there are plenty of other reasons to oppose an Oregon sales tax.

First, we all know that no government ever substitutes one tax for another, so the suggestion that we can eliminate our income tax by adopting a sales tax is really just another fairy tale.

Second, sales taxes are regressive, which is one reason that conservatives tend to prefer a sales tax: It shifts the tax burden to the poor and away from the wealthy, because minimum-wage workers pay the same percentage as high earners do under a sales tax system. As the head of the Republican Party for a Midwestern state once told me, "If we just tax the poor people a little bit more, the rich won't have to pay anything at all!" That is a big part of some conservatives' support for a statewide sales tax.

Third, sales taxes are collected in cash by shopkeepers of all sizes and stripes, including every mom-and-pop storefront and sandwich shop. As a result, sales taxes impose the entire administrative burden on shopkeepers, which is hardly fair or reasonable. Furthermore, small shopkeepers often are understandably tempted to treat the government's sales tax cash as their own personal lending tree, especially in times of economic hardship as we are experiencing today. That is just not a system that makes sense.

Taxation should be imposed on behavior that government wishes to discourage. So, the obvious question is: why impose a tax on everyday consumer purchases? Especially when there is so much other, truly bad behavior out there that needs to be discouraged, even by taxation.

Why not tax polluters? That way, we will be encouraging good behavior and taxing rude behavior. Our current system for pollution control mostly charges large air and water and solid waste polluters a permit fee, which does little more than pay for the EPA and DEQ budgets. Instead of these pittances, we should look to bad actors to pay a larger share of the cost of government, including the cost of our school system and the salaries of our state troopers.

Pollution comes in many forms, including carbon dioxide from cars, particulate matter from old non-certified woodstoves, warm sewage effluent released into our streams, solid waste that is pushing our landfills to the limit, and industrial pollution of both the toxic and nontoxic variety. Most of these types of pollution adversely affect public health in measurable ways, impair visibility and our quality of life, kill or impair fish and game populations and have other definitive negative impacts. This is the sort of behavior that our system of taxation should discourage, rather than discouraging everyday purchases at the department store with a sales tax. Of course, we must be vigilant to prevent unfair and unintended consequences of all taxes, by continuing such programs as the clean woodstove subsidy for low-income citizens.

What I am proposing here is that we consider the consequences of our tax policy. Those people who can afford cleaner cars and cleaner stoves and pollution-control-devices at their places of work should be given the chance to clean up, and when they refuse, tax them. Why do some people suggest that we impose a sales tax on everyday consumer purchases? I say tax Joe when he goes to the store only when he uses plastic grocery bags instead of reusable cloth or recyclable paper.

If the goal of the pro-sales tax forces is to tax consumption instead of savings, I say that is a noble cause. But I will point out that we have a perfect consumption tax already in place today: it is called an income tax, with deductions for business expenses, for IRA contributions and for virtually everything else that is not a consumption expense. Our income tax is actually therefore a consumption tax, with progressive rates.

If our government cannot live within the means of what it now collects in the form of income and property taxes, (government expenditures are a different subject for a different day), then we should think carefully before we leap onto the sales tax bandwagon.

Condé Cox of Jacksonville is a retired attorney who has been active in clean air issues. He also writes columns about wine for several publications in the Northwest. His progressive commentary appears in the Mail Tribune on the first Sunday of the month.

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