Because it would create a big budget problem for the state government, Measure 59 in the general election will generate a lot of opposition. But its central premise is correct.

The premise is that taxpayers should not have to pay income taxes on income they did not get.

In fact that's the way the federal income tax works, at least in part. The feds allow us to deduct all our state and local income and property taxes from the amount on which we pay federal tax. The exception is the payroll tax. That we cannot deduct even though it too is income we never see.

Measure 59 was initiated by Bill Sizemore, who apparently has rebounded from the efforts of public-employee unions to bury him for good with lawsuits, jury verdicts and judgments. The proposal would allow taxpayers to deduct their entire federal tax bill from their taxable amount for Oregon income tax purposes.

For 2007 the deduction was limited to $5,500 on joint returns. So if you paid, say, $10,000 in federal income taxes after deducting state and local taxes on your federal return, the state still taxed you on $4,500, which you, as an employee subject to withholding, never saw.

According to a committee that assessed the effects, the measure would save Oregon taxpayers an estimated $1.3 billion in 2009-11 and nearly twice as much in the following two-year budget period. State revenue would be reduced by the same amount. That could easily decimate state services on which a lot of people rely, so there's good reason to be skeptical about this ballot proposal.

Still, the very presence of this temptation on the ballot should prompt a serious discussion about tax reform in Oregon. Obviously we can't abolish the income tax as long as it provides most of the money for a lot of the things we ask the state government to pay for, from most school costs to the state police, the prisons, social services of all kinds, part of the health plan and all the rest.

So we'd have to find a different source of tax money, one that avoids the problem of taxing people based on income that they did not really get.

There is such a system. It's called a general sales tax, and it works pretty well in most states including all our neighbors. It's not that California and other states with a sales tax don't have budget problems, but there's no discussion about getting rid of the sales tax there.

We already have kind of a sales tax on the local level. Benton County and most mid-valley cities charge a sales tax on cable TV. They call it a franchise fee, but for taxpayers the effect is the same as a sales tax. So the concept is not quite as foreign as some in Oregon insist.

If Measure 59 is approved, a sales tax would certainly be required. But even if it's defeated, we should think of reforms. (hh)