SD,

This is an interesting discussion.  Assuming Oregon passes this tax, you are correct, for now, Oregon would reap initial revenue without Oregonians having the full 2.5% tax increase being passed along.  Nobody knows what percentage of that 2.5% will be passed along at this time.  I also agree that as time goes by, more states will "wise-up" and pass this "harmless" tax for its citizens also.  At some point citizens and legislators in states that haven't instituted this tax will begin to ask themselves are we subsidizing Oregon with higher prices here in Tennessee because of this tax?  The only conclusion one can come to is yes (see first sentence) and at this point, not only numbers but human emotions will come into play concerning perceived fairness.

Thanks to Oregon, those non-taxing states will be faced with a perfect "catch-22", don't institute the "Oregon tax" and subsidize others or pass the "Oregon tax" and raise prices.  Thus, as you stated earlier, a national sales tax!