By WW Staff.
Let’s take a pause on policy written on the back of bar napkins, or referred hastily by the Legislature.
Measure 118: NO.
Imposes new gross receipts tax; sends every Oregonian a $1,600 check.
This measure, also called the Oregon Rebate, is equal parts cynical and sloppy. It is also entirely unrealistic in ways that would be damaging to Oregon while doing relatively little to aid the people its architects want to help.
As automation and foreign competition wipe out working-class jobs, some economists have promoted the concept of universal basic income, in which the government gives people cash in lieu of lost jobs.
To achieve that end, Measure 118 would impose a 3% tax on gross receipts (sales rather than profits) on corporations with more than $25 million in annual sales in Oregon. The revenue from the tax would then be divided per capita and sent to every Oregon resident regardless of age or need. That means babies would get a $1,600 check and so would the state’s richest residents.
Per state estimates, the tax would raise about $7 billion a year and cut significantly into the existing general fund budget, forcing a reduction in basic services, such as education, health care and public safety.
Proponents began working on the measure six years ago. They say they wanted to provide a form of universal basic income to help Oregonians living in poverty. And they wanted to target the biggest corporations, such as Amazon, Comcast and Walmart, which they note, correctly, are skilled at avoiding taxes.
Tweaking the tax code to redistribute wealth can be a worthwhile endeavor, but it’s best done by the Legislature, with expert analysis, public testimony and a rigorous debate. This measure, proponents acknowledge, was written by advocates, some of them homeless, in Eugene coffee shops. Records show it is almost entirely funded by a handful of Californians who’d like to try an experiment in Oregon.
The result, if Measure 118 passes, would be further distortions of Oregon’s already onerous tax code. Oregon is one of just two states that charges corporations an income tax and a gross receipts tax. And no state has a gross receipts tax anywhere near 3%. (States more typically tax corporations on income. Critics have noted that grocery stores, in particular, have large sales in dollar volumes but very thin profit margins, typically less than 3%.) Many economists say Measure 118 would raise prices, reduce employment, and lead corporations to decrease the size of their footprints in Oregon. None of those is a good outcome.
Neither is it especially useful for Phil Knight to get a $1,600 annual rebate check. But he probably would cash it. So would you—and that’s the cynical part of this measure. It bets on most Oregonians being too craven to turn down free money, even if the larger effects are unproven and likely harmful.
Measure 118 would be by far the world’s largest experiment in universal basic income. By now, most Oregonians have developed a healthy skepticism for being treated as a social laboratory by out-of-state dreamers who would like to see if their ideas can scale without having to live through the consequences.
Indeed, perhaps Oregon is getting wise, as opposition to this measure has come from all quarters: Republicans, Democrats, and even advocates of UBI, including the left-leaning Oregon Center for Public Policy, which says Measure 118 gives far too much money to people who don’t need it. Vote no.