For the second time in eight years, Oregon voters appear to have rejected a hike on corporate taxes in the state.
Measure 118, a proposal to raise taxes on large businesses by more than $6 billion a year and distribute the money back to Oregonians, was trailing in initial returns Tuesday. The Oregonian/OregonLive called the race shortly after 8 p.m.
The apparent defeat comes after a campaign in which major corporate interests spent more than $15 million to shoot down the measure, trouncing spending by supporters. It suggests voters were uncomfortable with a redistribution of wealth that was broadly opposed by elected officials, labor groups, businesses and some progressive organizations.
Measure 118 would have slapped a 3% tax on businesses’ Oregon sales above $25 million, then divvied up the money raised among the state’s more than 4 million residents, no matter their age.
One analysis by state revenue officials suggested the measure would result in payments of around $1,600 to every Oregonian, from infants to the elderly. Backers used that figure to argue the measure would cut back poverty and boost the state’s economy, as Oregonians spent the new money. The state’s Legislative Revenue Office, which advises lawmakers on tax measures, said it would virtually eliminate state income taxes for people making under $40,000 a year in the process.
But Measure 118 faced opposition from virtually every corner of the political map. Even labor unions, who had poured millions into a similar corporate tax hike in 2016’s Measure 97, opposed a measure that would send the new taxes to residents rather than state coffers.
The measure was dogged by an opinion written by Oregon legislative attorneys, who believed that sloppy wording could result in an unintended reduction in the state’s general fund of more than $1 billion — a reading that the measure’s proponents dispute. The possibility of a budget hole soured politicians in both parties on the measure, along with the state’s major labor groups.
Some progressive groups that explicitly endorse policies granting people a basic, state-provided income chafed at the notion that even wealthy Oregonians would benefit from Measure 118’s annual “rebate” payments.
Most forceful though, were corporate interests, who argued that the tax hike would result in price increases for consumers, despite the fact the tax would have impacted fewer than 2% of businesses.
Voters have been inundated with ads calling the proposal a hidden sales tax, though legislative analysts suggested Measure 118’s impact could be a relatively mild 1.3% rise in prices by 2030. Business groups argued the impacts would be far greater.
Proponents of Measure 118 got the majority of their funding from out of state. A handful of wealthy California residents who support the idea of basic income spent more than $1 million trying to get the measure passed in Oregon, resulting in accusations by opponents that the state was being treated as a guinea pig.
This story comes from the Northwest News Network, a collaboration between public media organizations in Oregon and Washington.
Copyright 2024 Oregon Public Broadcasting
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