In Oregon, the state tax system puts the burden more on the rich than the poor.
Washington state is the opposite: Part-time workers pay up to 24 percent of their earnings in taxes, and people at the high end of the wage scale pay around 5 percent.
How do those differences play out in real life? We asked two baristas, one in Portland and one in Seattle.
On Northwest 23rd Avenue in Portland, Andrew Layton makes coffee for dogs and humans. He’s a barista at Java Hound, which serves pupocinos – “whipped goat’s milk with doggie treats on top.”
Layton works part time while attending college. “I live with my partner and my best friend,” he said. “I make about $1,000 a month.”
This austere lifestyle means he doesn't go out much. But he does pay state income tax, about 7 percent of his earnings. But he said it’s a non-event.
“I get all of my money back,” he said. “I get everything that I pay into the system back because of being a student.”
Layton still pays state taxes: they’re hidden in his rent. The District of Columbia’s annual report on state and local taxes says low-income earners making $25,000 in Portland pay about $1,700 a year in property taxes, but Layton is making less than half that.
In Washington state, part-time minimum wage workers – like students – pay up to 24 percent of their earnings in state and local taxes according to the state revenue department. For example, they pay property taxes in their rent – The District of Columbia estimates property taxes for a low-income earner making $25,000 at $2,100 in a year.
But in Seattle's University District, Ashley Becker is living in a sorority. She’s a part-time barista at Café Solstice where she works evening shifts.
“This week I worked four nights, probably a total of seven hours per shift,” she said.
Becker, a freshman at the University of Washington earns $10 an hour plus tips, which brings in about $15,000 a year. It’s the lowest-income bracket and the one worst hit by Washington's regressive sales tax, with an estimated 24 percent lost to taxes.
But in real life, it’s hard to parse out. Even Ashley Becker doesn’t know how much she pays in state taxes.
“To be honest, I don’t really try to keep track.” Because just calculating the total burden from sales taxes is too difficult.
“We have one of the more opaque tax systems in the nation,” said Dick Conway, a local economic consultant and critic of Washington's tax system.
“Individual income tax is perfectly transparent” because people calculate on their tax forms, he said. But in Washington state, it’s a silent running total. People pay taxes as they shop, so they pay often, but they don't have a sense of their tax burden.
“Even though they have the ability to know how much in sales taxes they pay,” Conway said, “few people keep track over time, and over time they have no idea."
So Becker takes this attitude toward her tax burden: “There’s no sense in worrying about all the stuff that I really can’t control,” she said.
Explore the graphic to see how taxes in Seattle stack up against other cities.
(Note: A negative number under income tax means the state offers a tax credit to low-income earners.)
Source: Government of The District Of Columbia, 2014
A sales tax does have merits. The rate applies to rich and poor equally. And when people choose to spend on goods they don’t strictly need, they are volunteering to be taxed.
Tom Potiowsky, a former Oregon state economist and now a professor at Portland State University, says the problem appears when you examine how poor people spend their money.
“If I’m a low income person, and I live paycheck to paycheck, then I don’t save anything, I spend everything," he said.
Poor people spend all they have, which means almost all their money gets taxed. Wealthier people typically save or invest their money – and that money is safe from the state's sales tax.
Potiowsky said that's why Washington's regressive system is unfair to low income people.
So the Seattle barista does not know her tax burden, which is estimated to be heavy.
And the Portland barista knows much of his tax burden, which is estimated to be light.
But when the two baristas graduate from college and their incomes start to grow, their tax burdens will reverse.
Ashley Becker in Seattle will enjoy one of the lowest tax burdens in the land. And Andrew Layton in Portland will face the higher tax burden, unless he moves to a state like Washington.
This story was produced in partnership with the Ravitch Fiscal Reporting Program at the City University of New York’s Graduate School of Journalism.
Correction 4/4/2016 at 1:30 p.m.: Due to an editing error, the incorrect tax burden was noted. The tax burden on low-income earners in Washington state is around 24 percent.