Oregon Sales Tax? Terrible Idea
|January 11, 1998||Posted by Jeffery J. Smith under Archive|
What, tax sales, not land? ["Hooray for a Sales Tax," Jan. 7, 1998] You want the poor to pay more than the rich? The sales tax is the most regressive of them all. Worse, if you eliminate the property tax, all you do is inflate the price of land. Plus, you overlook a more fundamental idea: using publicly generated values to fund public services.
Look, it’s society, not individuals, who generate the values which attach to land. Land values rise when people move in, when government expands infrastructure, when residents behave neighborly, when technology ups demand for a resource. Land value measures society’s health and belongs to all members equally.
Since the wealthier own more and better sites and resources, collecting land value — either via a land tax, land-use fee, deed fee, whatever — is highly progressive. Were we to share land value, we could reduce — even eliminate — taxes upon privately generated values: sales, wages and homes.
Low or zero taxes would keep Oregon’s economy humming with full employment, as they did in Hong Kong, once voted the world’s best city for business. Plus, collecting land value would spur efficient use of land, reversing sprawl, as it does in Johannesburg, South Africa.
Were Oregon to collect the worth of all the nature we use, the state would suffer an embarrassment of riches. An annual dividend would become a permanent fixture, a la Alaska’s oil dividend. Then, no matter how high land dues rise, this land dividend would keep up.
Forget pushing up consumer prices by turning businesses into tax collectors. Just share the public’s worth of Mother Earth.