Thursday, October 14, 2010

Dudley Says Kitzhaber Wants To Tax The Jobless

The campaign for Republican gubernatorial candidate Chris Dudley released its latest ad today. This one includes a fairly incendiary claim: John Kitzhaber "says we need a sales tax so people without jobs pay taxes." As proof, Dudley's handlers offer up the following quote from an article in the Portland Tribune:

Kitzhaber did not hesitate to use the “sales tax” term, though he said it’s just one of the options that should be under discussion so the state is not so reliant on income taxes. As incomes shrink and the number of jobless remains high, he said, it illustrates more clearly why Oregon needs to stop depending so much on personal income taxes to pay for the bulk of its general fund budget.

Kitzhaber has frequently stated during this campaign that he thinks the state should consider a sales tax, an idea which causes most Oregon politicians to run screaming and yelling in the opposite direction.  He's usually careful to fall short of an all-out endorsement of a sales tax, saying it's just one of several ideas to put on the table. But as ballots are due to arrive in mailboxes starting this weekend, the Dudley campaign clearly thinks voters will react negatively to even the thought of discussing a sales tax.

But the Dudley campaign makes a huge leap in logic when it says that Kitzhaber says Oregon "needs a sales tax so people without jobs pay taxes." As you can see from the original article, Kitzhaber was pointing out that Oregon's heavy reliance on personal income taxes makes the state's revenue stream especially volatile in times with high unemployment. Of course, it's true that a sales tax, which is paid by rich and poor alike, would bring in some money from unemployed people buying clothing, electronics, or restaurant meals. (Grocery items are excluded from sales taxes in many states.)  But the ad makes it seem as though Kitzhaber is proposing a sales tax for the specific reason that jobless people--who aren't typically big spenders, one would think--would pay those taxes. That's a bit of a stretch.