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Citizen's View: With IP 28, we will all simply pay more

I am responding to the Citizen’s View by Peter Wright, “IP 28 asks companies to take responsibility, alter behavior,” which ran in the June 2 issue of The Review.

Supporters of Initiative Petition 28 are advocating the imposition of a 2.5-percent sales tax on any sales made in Oregon by any entity enjoying sales exceeding $25 million in any tax year — that is, more than 1,000 companies, most of them big -name retailers, manufacturers and service providers. 

The only recourse they will have is to add a 2.5-percent charge to your invoice or sales slip.

So, get ready to pay that sales tax on anything you purchase at Costco, Macy’s, Target, Home Depot, Safeway, New Seasons, McDonald’s, most gas stations, virtually all major auto dealers, on insurance premiums and medical bills from large providers like Providence, and any airline, hotel or auto rental charges, etc. And while you may not see it reflected directly in those retail charges, expect retail price increases to cover the 2.5 percent that will be imposed on wholesale sales to those retailers.

This tax would provide a major incentive for consumers to buy online or out of state, and for employers to reduce head count.  Only a fool would buy a new vehicle from an Oregon dealer who has to add this tax (or reduce his employee compensation) to stay in business.

And with the door propped open by this sales tax, expect it to be expanded as it has been inexorably in every state that imposed a “modest” sales tax only borne by the “rich.”  In time, expect it to increase and be applied on virtually all sales by any size entity, as has been the experience in so many other states.

And don’t hold your breath waiting for other state taxes to be reduced. Unlike Washington, Oregon will have both an intolerable income and sales tax burden as the public sector soaks up and keeps demanding more revenue, year after year arguing that the problems this increased revenue was supposed to solve did not do the job.  What a surprise it would be if it did and public employment would have to be reduced!

Peter Wright ignores these economic and political realities, instead dreaming that raising the cost of production will somehow magically reform the mindset of those having to pay it and reduce income inequalities between the “rich” and the “poor.”  In fact, all will simply pay more if IP 28 is passed.  And of course, private employment will be reduced in favor of expanded government employment, satisfying the real aim of this sales tax.

Joe Breimayer is a resident of Lake Oswego.