Revenue Squeeze Pushes Cities, Counties to Get Creative on Taxes

Residents and businesses in Portland, Ore., this year were introduced to a new 3% income tax on wages above $250,000, and new 1% levies on personal income above $125,000 and business income for companies with gross receipts above $5 million.

That was on top of existing local business income, licensing, and transit taxes, and Oregon’s individual income, transit, and corporate activity taxes. All those layered levies saddle some taxpayers with a 26.2% marginal rate, according to an analysis by the Tax Foundation—and that doesn’t count property taxes or the city’s $35 “arts tax.”

Many of the nation’s 19,000 units of ...