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Oregon is only one of five states in the United States that doesn’t have a sales tax. In a recent interview, Oregon Governor John Kitzhaber said that he hopes to change that one day. Right now, Oregon is extremely dependent on income taxes for revenues. Over two-thirds of Oregon’s revenues come from income taxes. In comparison, the average state gets 20 percent of total revenues from income taxes.
Kitzhaber worries that the state puts itself in a vulnerable position by relying so much on one source of income. Income taxes tend to fall significantly during economic downturns which would put Oregon in a tough situation. By adding an Oregon sales tax, the state would have a more diverse stream of income.
Kitzhaber is currently working with state legislators to come up with an overhaul of the state’s tax code. This is going to be a tough challenge as the Oregon government hasn’t made any significant changes to the tax code since 1957. Kitzhaber is also up for reelection in 2014 so this could interfere with the process of changing tax laws.
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