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This page contains a single entry from the blog posted on February 22, 2005 8:55 PM. The previous post in this blog was Hoarse of the same color. The next post in this blog is I'm feeling lucky. Many more can be found on the main index page or by looking through the archives.

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Tuesday, February 22, 2005

Dumb Idea of the Week

A couple of members of the federal congressional delegation from the great State of Washington are about to introduce a bill to force Oregon to tax Washington residents who work in Oregon more favorably than us Oregonians.

Hey, if you 'Couverites don't want to pay income taxes like the rest of us who work here, stay home. You say you're getting such a raw deal having to pay tax in both states, but how come the parking lot at the Costco out by the Portland Airport is always full of cars with Washington plates? Let's face it, you're beating the Washington sales tax (and cheating on the Washington use tax) on half of what you buy, so quit the whining.

Finally, show me where Congress has the authority to tell Oregon how to tax nonresidents who have Oregon-source personal service income. The commerce clause? Not with this Supreme Court.

Senator Cantwell and Congressman Baird, you've now gotten your measly little news coverage and whatever political mileage you expect to get from it with your constituents. Please cut the comedy and get back to work.

Comments (21)

As an L&C student, and part-time employee, I contributed $1398 income tax dollars to Oregon. I'd like to complain about that, but I can buy the argument that I profit from Oregon's roadways, police, etc. The Costco argument rings a little bit hollow, since saving that money on sales tax seems to be a wash these days; our sales tax paid is deductible from our income taxes so any tax I don't pay is a lost deduction (See Schedule A, Item 1(f)). Besides that, if the government is going to lump my lovely Clark County into your Portland metroplex, I'll shop anywhere I want.

Hey, come on over and shop. But don't complain about double taxation if you're not paying what you're required to in Washington. Every time you drive over the bridge with a carload you bought in Portland, you're supposed to be paying Washington use tax. And we all know you aren't.

As for the federal deduction, you still pocket most of what you save by cheating on your Washington state use tax. For example, if you didn't pay $10 of Washington use tax, you would lose a federal deduction worth, at most, $3.50 in federal tax saved. You pocket the other $6.50. Not a very sympathetic case.

If Washington would like to start collecting sales taxes from Oregon buyers who shop in Vancouver, shoot -- er, I mean, suit -- yourselves.

I'm aware that the deduction doesn't equal the savings, but I'll point out that I (we) are under no obligation to increase our taxes. According to my Quicken files, shopping at Costco was a little less than 4% of what I spent last year; the balance was in Vancouver. Don't think I'm robbing the state too much on that one. I'd also be glad to put forth the "taxation without representation" argument; OR gets our taxes, but we don't get a say in how they're spent. And we all know you guys couldn't intelligently spend your way out of a paper bag. I also might reasonably argue that by working in Oregon, I already contribute to your tax base by making my firm more profitable, which then pays more taxes on its own and through increased income for its owners. My company can also afford to pay higher rents (which it does) and employ more people (who then pay more taxes). Finally, in the vein of "it's not a one-way street," I'd like to note that not all of my children's classmates are from WA.

I am not going to argue with anyone over tax policies, as my eyes glaze over just trying to fill out the simple 1040EZ form. However, I do have one question.

What is the solution for people who live in Vancouver work in Vancouver and shop in Portland? Are they skirting their tax responsibility? I say, yes they are?

Thus, I think Oregon Senators Wyden and Smith should propose a bill which implements a sales tax only on Clark County residents. Fair is fair.

Thanks, Jack, for exposing the Washington whiners for what they are. We're not talking about just Costco here - Jantzen Beach and the Airport area have many many more stores than just Costco.

Gaming the tax system between different states is not just an issue in Oregon and Washington, it's a time honored tradition in many split metro areas throughout our great federal system.

As for Justin's comments, my wife and I have already figured that one out. That's why my long term plan is to live and work in Vancouver, and shop in Oregon. With all the money I save, I can eventually buy a nice retirement home on Hood Canal or the San Juan Islands or someplace equally idyllic in the Evergreen State.

-N E W S R E L E A S E-
FOR IMMEDIATE RELEASE:

Monday, February 21, 2005

Contact:

Sundance Banks (Baird), (202) 225-3536

Charla Neuman(Cantwell), (202)309-3447


Baird & Cantwell to Introduce Interstate Tax Fairness Legislation


-New Proposal Would Prohibit Oregon from Levying Income Tax on Washington-State Residents-


Washington, D.C. - Congressman Brian Baird (D-WA) and Senator Maria Cantwell (D-WA) announced today that they will be introducing legislation in Congress to prevent the state of Oregon from imposing an income tax on Washington residents who work across the river.


"This bill is about tax fairness and common sense," Baird said. "Washington residents who work across the river in Oregon are forced to pay Oregon's state income tax, yet they receive few of the benefits those taxes provide."


"Southwest Washington residents working in Oregon are paying taxes to fund services they can't use," Cantwell stated. "They're getting a raw deal. Our country was founded on the notion that we oppose 'taxation without representation,' but that's exactly what's happening to Washingtonians who work in Oregon. Our bill would put a stop to this and replace it with the common-sense notion of tax fairness."


Baird and Cantwell's legislation would prohibit states from taxing residents of other states that happen to work within their borders. The Oregon Bureau of Revenue reported that in 2002, southwest Washington residents filed 51,991 income tax returns in Oregon, totaling $104,074,000. This is money that funds social, educational, and healthcare programs in Oregon to which Washington residents do not have access.


"Senator Cantwell and I both recognize that it will be a tough fight to pass this legislation, but it is a fight the citizens of Washington deserve," Baird added. "The injustice of this situation could not be more obvious. Every year over 50,000 Washington residents who work across the river in Oregon have to pay an income tax to a state that does not represent them in government and does not provide them with health care or educational services."

I called Brain Baird office yesterday and they sent me this press release, I think this bill should be dubbed “The Lars Larson Bill”. Like I’m going to travel across the Interstate logjam to shop up in the couv? This is a bipartisan bill also with Cantwell and to me as an Oregonian it just doesn’t make sense.

It will be interesting if Lars advocates for this bill from the stance of a Washingtonian, I think today Lars will be talking about this bill on his show.

I don't think it has any chance of passing, it is all about showing Vancouverites that somebody cares about them.

Why stop at taxing non-resident workers?

The rationale for taxing them seems to be that they can take advantage of some of Oregon's public services as they spend about 25% of their time in our state.

But aren't tourists getting a similar free ride for the duration of their vacations in Oregon?

Maybe we should require Oregon tourists pay part-time resident income taxes.

Obviously, Oregonians are tired of taxing ourselves. Maybe it's time to explore all the ways we can extract money from out neighbors.

Could we levy a Mt. Hood viewing tax on southern Washington?

The only way to tax drive-through tourists is with a sales tax. An income tax doesn't hit them because they don't earn income here. Even a motel tax doesn't bite them if they drive back to the ranch house in Camas or wherever at the end of the night.

The folks in the Couv can look at Mount Hood all they want, and they're free to come down, shop, and enjoy our state, completely tax-free. But when they start working here, they can pay a king's ransom to the state, and some nickels and dimes to Tri-Met, just like the rest of us. If this is not to their liking, they're perfectly free to stay up north and use the roads, street lights, workers' comp systems, labor laws, and police protection in greater metropolitan Amboy instead.

If they work in Multnomah County, they should be thankful they don't have to pay those birds too.

Be careful what you wish for Jack.

If the pace of jobs migrating across the river continues keeps growing, Portland may eventually qualify as a feeder suburb for the Clark Co economy.

Fine with me. Time for some Randy Gragg condo towers along the Washington side of the Columbia.

Given the tax systems, no one in their right mind would live in Portland and commute to work in Vancouver, so this migration would put some of our sprawl problems onto somebody else's back.

The real howls will come from New York, which has commuters from New Jersey and Connecticut who would escape New York's income tax -- bigger dollars, I'm sure, than those paid by Vancouverites working in Oregon.

PanchoPdx. Do you have any statistics? I'm curious.

To the best of my knowledge, all roads are paid for with gasoline taxes. I don't know why people always mention roads when they are justifying income or property or (non-gasoline) sales taxes.

There is the occasional city or county bond issue that, if approved, pays for specified road projects, now called 'transportation' projects.

For the most part, though, roads and highways are paid for by users, meaning for those of us (not me) who think the term 'fair tax' is an oxymoron, that the gas tax actually is almost fair.

Mac,
In this context, I think Oregonians would have a good gripe about Vancouverites not paying their fair share for the roads. It may be true that gas tax pays for the roads, and thus the users pay, but not if they don't contribute to the tax fund. Gas, for me, is cheaper when I buy it near my home in WA. I almost never buy gas in Oregon, yet 30% of my car miles are put on in Oregon. Am I paying for their roads? Probably not out of the gas tax I'm paying, unless you count the federal gas tax that might eventually end up back in Oregon.

Yes washington residents do go to oregon and purchase goods. Think how much money is gained for Oregon this way. Ive heard of figures of greater than a billion dollars a year. That's a good thing for Oregon state and bad for washington as washington doesn't collect any taxes on that money. As mentiond above fuel taxes pay for roads. Income taxes pay for social services, Oregon health plan, schools, O.S.P. Many of these are not available for washingtonians even though we pay for them. If i had children could i enroll them in say the porltnad public school district. I dont think i can but let me know. As for if you dont like it dont work types, its assumed that the employer has hired the person best suited for the job reguardless of where there domicile is.

No reason to argue about this: the legislation will die. Too many opponents from NY, NJ, PA, IL, etc., all states which tax commuters.

In 1984(when I was married) Oregon restructured their taxes which WOULD HAVE taxed my wife even though she did not work in Oregon as I did.We both lived in Walla Walla. It created a howl. I wrote many letters to the Walla Walla Union Bulletin and had meetings in WW which were attended by then reps Struthers and Hayner. Eventually.....Washington threatened to tax Oregonians a "user tax" to those that worked in Washington i.e. St Marys hospital, Washington State pen.,Corps of Engineers and other major employers in the Walla Walla area. I believe it was about $50.00 or so a month. Oh the "bitchin" I received at my Oregon workplace in Milton-Freewater. How I soon learned that no one gives a rats ass until THEIR toes are stepped on.Oregon then dropped the proposal and Wa. did not enact the user tax. It would have taxed ALL Oregonians who worked in Washington. Hey.....we even blocked the I-5 bridge from Wa. to Or. and got a lot of headlines.Even had bumper stickers. Now.......I work and LIVE in Oregon. Ha!!!! Same thing could happen again except in reverse. You "dawgs" are supposed to report to the Attorney General ALL taxable goods and you know it. It COULD get ugly again but I dobt if it will. Any time there is two diverse tax structures abutting one another there is always going to be disputes and acrimony. We've learned to live with it in the past and now these two Senators are whippin it up and I do believe it will fail. If it does pass......look for me to stir up the pot for a "use tax" again, except for Washington residents who write checks or use credit cards in Oregon. Pay cash? Everyone is on a credit margin it seems and when a Wa. resident wanted to buy a $1500.00 surround sound system..cash only. If any purchaser showed more than $50.00 worth of cash for ANY item...I.D. required and if it is a Wa. resident.....give them the user tax. There are other devious ways also. One CAN be creative here. How many people use credit cards vs. cash these days? It CAN and WOULD be done.

Tim, there's no way a law could require I.D. for a cash purchase. You'd run into all kinds of nasty Constitutional problems. Or, at least, that's my gut feeling -- Jack? You could do that at a store level, I suppose, but not at a state level.

I don't live in Oregon anymore, but Illinois has the same problem as Oregon, with people from Wisconsin and Indiana commuting to work in Chicago. So I'm highly sympathetic to the idea of a use tax. But do it for the right reasons, which is because it's not fair to have people working and shopping in Oregon and living in Washington to avoid paying either an income tax or a sales tax, rather than punitively or in retribution.

OK so the issue is a year+ old. And I have read through these comments, regardless doesn't it fundamentally bother you that Oregon is enacting taxation without representation, gee the thing I learned in grade school history that was one of the reasons this country came into being??

As for other states, NJ/NY...etc., OR currently charges one of the highest income taxes (comparisons of ranges puts OR in the top 3 next to DC & VT source: http://www.taxadmin.org/FTA/rate/ind_inc.html) and yet still OR has such poor showing of management of those tax funds. In addition, when looking at the WA sales tax vs. the OR income tax - sales tax is charged only on certain items purchased in WA and can range from 7.5-8.1%. OR income tax is a flat 9% from the tax payer's income.

I choose to live in WA because it has a lower crime rate, housing is better priced, and I understand the school systems are preferred. All this without WA INCOME TAX?? Why however do they do it? Must be magic. Maybe I'd live in OR if the tax dollars I paid actually benefited me, which they don't no matter where I live. So why would I want to not pay tax - well dar, it would be an income increase, but to slap the OR politician hands - now that would be a little satisfying.

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Jack Bog has a post that leads to an article in the Seattle Times that reports about the a bill introduced in the US Congress by Washington Sen. Maria Cantwell and Rep. Brian Baird that would require Oregon to quit collecting incomce tax from Washingto... [Read More]


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