Measure 118 would tax the sales of large corporations and return the proceeds in equal amounts to every state resident on their tax returns or through the Department of Revenue. (Getty Images)
Measure 118 is more of a thought experiment than a credible ballot measure.
But despite the many problems with its proposal to increase corporate taxes to fund cash payments for Oregonians, the measure does contain, to borrow a phrase from the recent presidential debate, some interesting “concepts of a plan” to improve our current system of taxing and spending in Oregon.
I expect a majority of Oregonians, myself included, will reject Measure 118 as a product of wishful thinking and sloppy, back-of-the-napkin drafting. But there are elements in the measure that raise questions worth considering.
One brings to mind Oregon’s tax kickers and whether the state should restructure such rebates to provide equal amounts to all Oregonians. The other is whether new taxes of any kind should be dedicated to certain purposes beyond funding for services, such as creating savings accounts for our children.
Measure 118 would tax the sales of large corporations under the guise of a minimum tax and return the entirety of its tax proceeds in equal amounts to every resident of the state every year.
Initially, the proposed rebate was estimated at $750 per person, but that estimate was raised to an average of $1,600 per person once the number crunchers at the state capitol realized Oregonians were buying a lot more stuff from large grocery chains, gas stations and big box retailers than they had thought.
That higher amount is likely to attract a second look from many voters. It also bolsters the argument that this is a step toward establishing a “universal basic income” or UBI, by which people would be guaranteed monthly payments to pay for the basic necessities of life. It is this characterization of the measure as a form of UBI that has attracted the backing of wealthy California tech bros and investors who view Oregon as a cheap ballot measure laboratory for testing their concept.
I got a call from a person representing one of those California backers earlier this year, asking me what I thought of the measure’s chances and what advice I might have for developing a campaign plan for its passage. In response, I pointed out what I thought were the flaws of the measure (it’s clearly a hidden sales tax) and the likelihood that a resounding “no” vote would, if anything, set back the case for the UBI concept within and beyond Oregon.
My critique of the measure then was pretty much what I’m seeing in the coalition of interests, and the arguments they’re using, to oppose it now. Raising taxes just to give away the proceeds is not intuitively attractive to most of us. It’s anathema to conservatives. And it’s a problem for progressives who fear that every dollar diverted from state revenue streams is a dollar lost for better spending purposes.
Plus, the timing for this measure is politically fraught. Business taxes were raised in 2019 with a tacit understanding among leaders in both political parties that they won’t be going back to that well any time soon.
Finally, Measure 118 contains all kinds of rookie mistakes that are easy targets for opponents, such as giving the rebates to noncitizens and even those who died in the rebate year. Those arguments are featured prominently in the state’s Voters’ Pamphlet.
But what about the idea of testing support for UBI? It’s hard to argue that even $1,600 a year per person comes close to paying for “basic” necessities. And I doubt that any state could reach the “B” in UBI without drastic cuts to their public education and safety net programs, which are essential for low-income families.
Measure 118 is more a test of using the tax system to redistribute income in pursuit of equity than an attempt to elevate everyone to economic self-sufficiency.
If equity is the goal, the better approach is to start with what we’re doing now. When Oregon refunds tax revenue in good times, as the state does almost regularly now with the kicker, we should do so in equal amounts. As I argued in a previous commentary, a per capita distribution of the kicker would better compensate for the tax burden borne directly and indirectly by low-income families as taxes flow through to their rents, their gasoline purchases and their electric bills.
Further, if we can make space in our public budgets for direct payments to our citizens, I’d start with dollars to create opportunity funds for our children. “Baby bonds” are one idea that has long searched for a funding mechanism. And if we’re going to win public support to raise taxes in the future, presumably in more modest amounts than proposed in Measure 118, we’ll need compelling purposes to make real for voters the idea of “investing in our future.”
Those are the concepts that I wish the wealthy backers of Measure 118 had considered. As it is, their measure deserves a “no” vote, with an “if only” asterisk attached. If only those backers had decided to put their money behind a smarter, more modest proposal geared to the realities of taxing and spending in Oregon, they would have had a far better chance of advancing their avowed goals of tax fairness and economic opportunity for our people.
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