Who is "Defeat the Tax on Oregon Sales"?

Yes, if you raise prices to help pay your sales tax, you will have to pay slightly more of the new sales tax. However, you're only paying an additional 2.5 cents for each additional dollar you take in, so you do a little bit of math and figure out how much more you need to take in to cover those new taxes.

So (taking a completely hypothetical set of numbers), if you figure out that this new tax would cost you an extra $1,000,000 per year, you can't just pass on an increase of $2 for each of your 500,000 customers. Because you have to account for the recursive addition of that 2.5% tax, you have to start at 1,025,000 in new revenue, then add 2.5% to that, and so on. eventually you will get to a point where the effect dies down into noise, rather than signal. With a 2.5% tax on $1,000,000 of sales over that $25M threshold, this dies down rather quickly, meaning that the business would have to earn 1,025,641.03 in sales to "cover" the new tax -- so a pass-through of about $2.05 per customer instead of $2.

/r/Portland Thread Parent