10
allowing division of income and sepa
rate returns.
Case I——
With sales tax and reduced
income tax—Personal exemptions would
be $2600. Taxable income would be
about $2560. ($3,000, less, $140, less
two standard deductions of 5 per cent
each). No state income tax. Sales tax
about $32. Total tax $32.
Case II—No sales tax and increased
income tax—Personal exemptions would
be $1600. Taxable income would be
about $960 v($3,000 less; $140, less
two standard deductions of 5 per cent
each). State income tax about $19. No
sales tax. Total tax $ 19.
It is a fact that the combined sales
tax and reduced state income tax will
cost the average family more than
would the alternative plan of no sales
tax with increased state income tax.
This is true in all income brackets; It
is estimated that such increased costs
would range about as follows for
four-person family:
Gross
Income
Est. Annual
Increased Cost
Sales Tax Plan
$ 1,000
2,000
3,000
4,000
| 5,000
7,000
10,000
' -$,12 i
H R 3
U
8
14
I B B !
39
Some other effects of ;the twp al
ternative plans appear to be:
1. The sales tax plan would elimin
ate income tax payments for an ini,
creased number of people. On the other
hand, it would bring into the direct
tax-paying body a large g r o u p of
people who now pay no direct taxes,
2. The alternative increased income
tax plan (effective January
1947, if
the sales tax plan is defeated) would
increase the number of people who
would be required to file forms and
pay a state income tax, and would
impose a 1 per cent withholding tax on
all wages and salaries to catdh tax pay
ments from part-time workers, tran-
sients, etc., who might otherwise evade
payment.
3. The revenue to state funds for
general governmental functions appears
to be slightly greater via the increased
income! tax basis, while the revenue, to
the state as a whole (state, county, city
and school district funds) appears to
be greater via the sales tax basis.
Nearly two-thirds of all the greatest
deeds ever performed by human beings
—the victories in battle, the greatest
books, the greatest pictures and statues
^rrhave been accomplished after the age
of sixty.
9— Highways of Happiness.
Discussion Of Proposed
Sales Tax Plan
By VIRGIL G. O’NEIL, Director of Public Relations
The writer claims no superior knowl
edge of the subject of taxes, and pro
fesses no prejudiced views on the mat
ter. However, it seems fair to analyze
the proposed sales tax measure on the
bases of (1) factual data, (2) human
behaviors (3J- economics and (4) the
general welfare of the state. The fol
lowing analysis and opinions are those
of the writer.
Factual data shows that county, city
and school taxes now levied on property
will be reducible by about eleven million
dollars a year, based on expert estimates
of Oregon’s current spending. This re
duction in property taxes is state-wide
and removes to large extent the present
hazard of losing one’s property through
failure or inability to pay a property
tax. The theory of property taxation
isbased, on an ancient method, its pay
ment is mandatory if one is to preserve
his investment, and it has been the
creation of many hardship cases in old