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The most complex and divisive measure on the Oregon ballot is the proposal to hike business taxes and divide the proceeds among state residents. This measure was placed on the ballot by initiative petition.
Measure 118 would apply a 3% tax on a business’s Oregon sales above $25 million. The measure could then send around $1,600 a year to every Oregonian beginning in 2026 — either with tax credits or direct payments. Those payments would go to anyone residing in the state for more than 200 days each year – regardless of age, income, or citizenship. Nike founder Phil Knight would receive $1600, as would anyone incarcerated in our state prisons.
A family of four would receive over $6,000. Supporters say the measure would reduce poverty in Oregon and child poverty, particularly by about 26%. They believe it creates a more fair taxing structure for corporations, which they argue are too often able to game the state’s tax code to pay lower taxes.
In addition to a 6.6% to 7.6% Income and Excise tax, Oregon corporations now pay a 0.57 percent Corporate Activity Tax which you often see added to your sales receipts. The Measure 118 proposal is six times higher.
It’s unclear how much lower-income Oregonians would actually receive each year if the measure passes. That’s because the measure could impact those receiving benefits that are based on economic need. It’s possible that Measure 118 yearly checks would reduce or eliminate access to things like the Supplemental Nutrition Assistance Program (SNAP or “food stamps”) or Medicaid.
To remedy that, Measure 118 provides for “hold harmless” payments that would reimburse Oregonians for the value of any lost benefit.
According to legislative attorneys, this would cost more in rebates than it ultimately raises in taxes. The state’s analysis suggests that Oregon will spend well over $2.5 billion in future budget cycles that it otherwise would have used to fund things like schools, fighting wildfires, and health care.
Let me say that again. If passed, this Measure will cost $2.5 billion more in tax revenue than it generates.
Economic modeling by the state’s Legislative Revenue Office, which analyzes tax policy for lawmakers, found Measure 118 could increase retail prices 1.3% by 2030. The analysis also suggested the measure could slow growth in employment and wages. You can read the entire legislative analysis here.
A long bipartisan list of opponents includes Democratic Governor Tina Kotek, most state legislators in both parties, labor unions, businesses and progressive groups including the Oregon Center for Public Policy. Find a list of those who have indicated their opposition here. You can learn more about the chief petitioner here.
In their editorial endorsement, Oregon Live stated, “Oregonians should heed the state analysts, independent think tanks and elected officials all warning of the unintended consequences of this measure. A tax that raises the price of medicine, food and utilities, saps funding for essential services and sends that money as rebates to all residents – regardless of income or need – is a formula for chaos.”
Oregon needs a serious conversation about income equality and corporate taxes. I don't believe this particular measure is the answer.
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