A Tax That Stacks is Bad For Oregon Housing

Measure 118 (also known as the Oregon Rebate) offers a cash payout in exchange for higher taxes on companies whose sales exceed $25 million. It would also drive up inflation, strip school funding, and cripple the housing industry.

A new proposal on the November ballot is getting a lot of attention.

Measure 118, also known as the Oregon Rebate, proposes sending every person who resides in Oregon for 200 or more days per year a check once each year for $1600. The money would come from a 3% gross receipts tax on companies whose sales exceed $25 million.

While it sounds enticing, M118 would be a disaster for Oregon’s economy, especially homeownership. M118 is opposed by members of both parties, including Democratic Governor Tina Kotek and Senate Republican Leader Daniel Bonham, who see that it would drive business out of Oregon even as it pushes lower-income households further into poverty and strips out funding for schools and essential services.

Tax Fairness Oregon calls the measure “a hot mess” and the Legislative Revenue Office estimates that it would drive inflation up 1.3%. Like paying more for food? You’ll love paying 1.3% more.

Common Sense Institute points out that because the tax focuses on a few high-earning businesses, it actually provides an incentive for them to avoid the tax by restructuring, limiting production (and reducing their workforce), or raising prices by at least 3%. Hardest-hit industries would be utilities, healthcare, and construction including new home construction. Worse yet, the tax stacks through the supply chain. The No on 118 organization has more details on how this “Tax on a Tax” would affect final sale prices.

With today’s housing situation in Oregon, we don’t need a tax that makes houses more expensive while it also worsens the affordability crisis by forcing prices on everything Oregon even higher.