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Income
tax is based on a net-income concept;
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Sales
tax is based on a gross-income concept;
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Property
tax is based on an asset-value concept.
When we shifted the
primary support of schools from the asset-value based tax to the
net-income based tax, we undercut our ability to predict.
We moved away from
the property tax because the burden lies mainly on the homeowner. At the
same time, most residential and commercial rental property owners pay no
tax to the state on the income they derive from rental
property because most rental property creates negative net-income.
In the case of the out of
state owner, money leaves the state in many cases with little or
no tax generated to the state using the net-income model.
It is possible to assess a
1% tax on gross rental income using the data on the income tax form,
adding one line to our state income tax forms and to collect revenues
which could be dedicated strictly to schools.
As a result, collecting
this tax would cost the state nothing.
This moves the tax back to
the asset-value property without affecting the homeowner; moves the
burden of supporting the schools back to the property owner; taxes both
businesses and consumers indirectly, but in a way that cannot be avoided
by simply diverting funds into expenditures which could be either in
state or out of state in nature, and can be collected without additional
cost.
We would
hope that this money would, initially, be dedicated to tuition relief
for university and community college students, who can LEAST afford the
burden that severe budget cuts have placed on them!
According to the best data
from the Oregon Department of Revenue, Gross Rentals for Oregon last
year were approximately $3.5 billion which means that this measure would
raise at least $35 million in revenues that frankly have not been taxed
because it's so easy to never show a profit on rentals.
