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Published on January 23, 2024
Oregon's Tax System Favors Wealthy Less Than Most States, Still Faces Criticism for Burden on Low-Income EarnersSource: edwinchuen, CC BY 2.0, via Wikimedia Commons

While it's no secret that the country's wealthiest often enjoy more favorable tax conditions, a recent report by the Washington, D.C.-based Institute on Taxation and Economic Policy indicates that Oregon's tax system, though still criticized for favoring the rich, is less oppressive for the wealthy than the majority of states, as revealed in an OPB report. According to the findings, the lowest-income earners in Oregon bear a heavier tax burden, shelling out about 12% of their income unlike the wealthiest 1% who pay around 10.4%, yet the state stands out, ranking 42 among all 50 states and the District of Columbia in terms of tax regressivity.

However, not every observer is toasting to Oregon's comparatively fairer tax system; the Oregon Center for Public Policy is lobbying for significant reforms, arguing that the current framework is fundamentally unfair, per a report summarized by the Oregon Center for Public Policy. The advocacy group suggests remedies including cutting taxes on the poor and boosting the state's Earned Income Tax Credit, which is currently set at just 9% of the federal EITC or 12% for families with young children, and establishing a Millionaire’s Tax, which Oregon, compared to other states, does not yet enforce.

The "Who Pays" report examines the cumulative effect of state and local taxes on different income brackets, but it's crucial to note that despite Oregon's absence of sales tax and progressively higher income taxes for larger earners, the tax burden on low-income individuals remains disproportionately high which is "encouraging" but not comforting to those struggling to make ends meet, Daniel Hauser, deputy director of the Oregon Center for Public Policy told OPB. Comparatively, the report positions Florida as having the most regressive system, with tax burdens falling hardest on those with the least ability to pay, while jurisdictions like Washington D.C., Minnesota, and Vermont are marked for having more progressive systems.

Oregon's tax policies are under scrutiny, sparking a discussion about fairness and practicality in the context of national debates on wealth inequality and fiscal responsibility. The Oregon Center for Public Policy suggests solutions to ease financial pressures on low-wage families and address wealth accumulation among the affluent. They argue that extreme economic inequality is not just a moral issue but also harms society, impacting lifespans and quality of life. These arguments are grounded in their analysis, urging state legislative action.