Lacy: End the sales tax for Upstate California, and revitalize retail industry and jobs.

Some States have no income tax—and live by the sales tax.  Trump has talked about using tariffs to finance a limited government and getting rid of the income tax.  Now it is being suggested, for the economic health of portions of California, to get rid of the sales tax.

“Neighboring Oregon is one of the five states that does not have a sales tax. https://www.cnbc.com/select/states-with-no-sales-tax/. The lack of a sales tax does not stop Oregon from its mandatory requirement to balance its state budget every year. And in 2023, Oregon had so much money it contemplated returning over $5 billion in excess revenues to taxpayers. https://www.opb.org/article/2023/05/17/oregon-revenue-forecast-budget-kicker-walkout/. Oregon has figured out how to raise sufficient government revenue without the need for imposing a retail sales tax.

Yreka is a city in Northern California not too far from the Oregon border. It is the county seat of Siskiyou County. As of the 2020 census, the population was 7,807. Yreka is home to the College of the Siskiyous, Klamath National Forest Interpretive Museum and the Siskiyou County Museum. The combined sales tax rate for Yreka is 7.75%. The total sales tax rate is the California state tax (7.25%), the Siskiyou County sales tax (1.00%), and the special tax (0.50%). Yreka doesn’t levy a city sales tax.

Medford is a city in southern Oregon. It is less than an hour’s drive from Yreka, just about 54 miles away up the Interstate. It does not add a state sales tax to purchases at its retail stores.

So now I will start making assertions based on common sense, but what the Los Angeles Times or the New York Times would report as statements “without evidence.” My first assertion based on common sense but without evidence is that a person in Upstate California who lived in a city like Yreka, within driving distance of a Target based in southern Oregon, say the one on Crater Lake Highway in Medford, who wanted to make a major purchase, who probably take their retail business to the Target in Oregon rather than the one in Yreka.

Lacy makes an excellent assertion.  My friend Celeste lives in Northridge, in the city of Los Angeles.  For big purchases she drives 10 miles to Simi Valley or Thousand Oaks.  Ventura County has a sales tax rate of 7.75%–Los Angeles, close to 11%.

This is a good starting point for the elimination of either an income tax or a sales tax.  Of course, government would have to be cut down to legitimate size to make it work.

End the sales tax for Upstate California, and revitalize retail industry and jobs.

James Lacy, Subtract,  5/26/25  https://jamesvlacy.substack.com/p/end-the-sales-tax-for-upstate-california?utm_source=post-email-title&publication_id=3729321&post_id=164493594&utm_campaign=email-post-title&isFreemail=true&r=x9o3&triedRedirect=true&utm_medium=email

Sales taxes in California are consistently among the highest In the nation. I offer evidence supporting this assertion in my 2014 book “Taxifornia,” and Fox News commentator Steve Hilton reasserts the same facts in his new book “Califailure.” And I was recently confronted with the evidence again in purchasing a watch in New York. I asked the salesperson whether it might be better to ship the watch to my home in southern California than to just pay and walk out the door with it, and she said, “well, you will have to pay more for the sales taxes in California.”

Neighboring Oregon is one of the five states that does not have a sales tax. https://www.cnbc.com/select/states-with-no-sales-tax/. The lack of a sales tax does not stop Oregon from its mandatory requirement to balance its state budget every year. And in 2023, Oregon had so much money it contemplated returning over $5 billion in excess revenues to taxpayers. https://www.opb.org/article/2023/05/17/oregon-revenue-forecast-budget-kicker-walkout/. Oregon has figured out how to raise sufficient government revenue without the need for imposing a retail sales tax.

Yreka is a city in Northern California not too far from the Oregon border. It is the county seat of Siskiyou County. As of the 2020 census, the population was 7,807. Yreka is home to the College of the Siskiyous, Klamath National Forest Interpretive Museum and the Siskiyou County Museum. The combined sales tax rate for Yreka is 7.75%. The total sales tax rate is the California state tax (7.25%), the Siskiyou County sales tax (1.00%), and the special tax (0.50%). Yreka doesn’t levy a city sales tax.

Medford is a city in southern Oregon. It is less than an hour’s drive from Yreka, just about 54 miles away up the Interstate. It does not add a state sales to purchases at its retail stores.

So now I will start making assertions based on common sense, but what the Los Angeles Times or the New York Times would report as statements “without evidence.” My first assertion based on common sense but without evidence is that a person in Upstate California who lived in a city like Yreka, within driving distance of a Target based in southern Oregon, say the one on Crater Lake Highway in Medford, who wanted to make a major purchase, who probably take their retail business to the Target in Oregon rather than the one in Yreka.

My second assertion without evidence is that the Target in Yreka probably would do a lot more business and employ a lot more people but does not, because of California’s high sales tax. My third assertion without evidence is that Oregon is stealing a great deal of retail business and jobs from Upstate California because it costs 7.25% less to do retail business in Oregon rather than Upstate California. And this, (along with other factors like trends in population) has been resulting in gradual declining economic conditions in far Northern California. But this decline can be easily addressed, through common sense. My common sense proposal is called a “sales tax differential.” California can transform economic conditions in the Upstate region by eliminating the state sales tax in all northern counties within one hour driving distance to Oregon.

Retail trade employment is a problem throughout communities in far Northern California and especially in Siskiyou County. According to the California Department of Transportation, “Going forward, retail employment will struggle to increase further. Over the 2022-2027 forecast period, the size of the retail industry is unlikely to change dramatically as brick-and-mortar shops encounter the headwinds of online shopping and local population.” Far Northern California seems to be left behind the rest of California with higher unemployment rates and lower wealth, and fewer state services. These unfavorable conditions have had political ramifications, with a movement even to separate the area into its own “State of Jefferson.”

State sales tax revenues are already depressed in Upstate California because of the competition from Oregon. Dramatically cutting the sales tax in these counties would, by common sense, have the affect of increasing retail trade traffic at home, meaning more jobs, more wealth, and even more employment tax revenue for California. It would expand economic opportunities for businesses large and small. Without evidence, I assert that establishing a sales tax revenue differential of 0% for far Northern California would be an inexpensive redevelopment program that would help our state’s residents in an often neglected part of the state and restore some “gold” to the Golden State as a whole. It would be a politically popular move in an increasingly Republican part of the state, and I am hoping that the emerging Republican candidates for Governor will give some thought and research on my proposal and consider including it in their campaign plans. This is a proposal that would unite Democrats and Republicans in the north. That would just be common sense.