SALEM, Ore. (AP) — A new report showing that rising income inequality could negatively affect state tax revenue comes amid a push by Gov. John Kitzhaber, legislative Democrats and others to overhaul Oregon’s tax code.
With no sales tax and property taxes constrained by 1990s ballot measures, Oregon relies on the income tax for nearly $7 of every $10 it collects - more than any other state.
A report from the credit rating agency Standard and Poor’s suggests that income tax-reliant states like Oregon face a future of declining growth in state revenue. That could force the state to severely cut services or raise tax rates.
Kitzhaber has been working for more than a year to get union and business lobbies to compromise on a more diverse tax system.
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