California Policy Enters Oregon by Francisco Ferrisi
Measure 118, for those who may be unaware, functions as a severe sales tax, despite the novel methodology which allows supporters to claim it isn’t. That said, what’s arguably more interesting, and less often talked about, is the question not of what, but of who. A lie is always concealing something, and the measure’s campaign is foundationally constructed on half-truths and omissions so brazen one has to wonder what motivation hides underneath. Who, exactly, is the measure designed to help?
Because it’s not designed to help ordinary Oregonians.
A $1600 rebate hardly makes up for the massive increase in expenses that the measure would incur. If a company makes anything past $25 million in sales, completely ignoring factors like business expenses or cost of goods, then they’re slapped with a 3% tax.
This is kryptonite for low-margin businesses, who don’t make much more off a product than it took for them to get it in the first place. Imagine if a retail store spent 26 million to buy clothes, for example, at a 3% profit margin, which is the industry average. Assuming they sell all of it, they’ll only make around $800,000. A 3% tax is going to hurt, and that’s not even factoring the tax pyramiding: if our store’s distributor is also based in Oregon, they too would be subject to the 3% tax.
You know what industries have low profit margins? Gas stations, transportation, housing, agriculture, grocery stores, construction. Most essential goods – the things that working class Americans have to spend money on every day – aren’t particularly profitable industries and would struggle to survive under this new tax.
This measure obviously wasn’t meant to benefit ordinary Americans, because ordinary Americans are concerned about inflation, and 118 is inflation incarnate.
How about Democrats? Well, even progressive groups like the Oregon Working Families Party and the Farmworkers Union have long since withdrawn their endorsements, to say nothing of rank-and-file Democrats, who never liked the measure in the first place. Democrats want money to pay for their expensive programs, not rebate checks. Measure 118’s tax doesn’t even make up all the lost general fund revenue from paying each Oregonian $1600 a year.
Okay, so who’s backing this thing?
A better question would be: Who’s left? Neither Democrats nor Republicans like it, Progressives are split, and most businesses are pouring millions into its opposition. The only group the measure doesn’t directly hurt are high-profit industries who can absorb the cost.
Unless, of course, the funding is coming from outside Oregon.
Measure 118’s biggest donor is Josh Jones, an investor from Los Angeles who made his fortune from cryptocurrency stock.
“I’ve got no skin in the game, I put some money in, it’s sort of an outside bet,” said Jones in a video he posted on Reddit.
Other financial backers include a San Fransisco-based UBI supporter and a former Tesla engineer from – you guessed it – San Fransisco. In fact, a cursory glance at all of Measure 118’s donors reveal that the vast majority of large donations come from California.
Now it makes sense. California millionaires are willing to spend money on the measure because they don’t have anything to lose. If Oregon suffers, these California donors don’t have to spend a dime making up for it. Thus, Measure 118 amounts to a political pet project from detached, idealist millionaires who are still stuck in a time when some people thought Andrew Yang had a chance at the presidency. He didn’t, and he’s completely irrelevant now, but his UBI message struck a chord with the tech elites, who now feel that they can magnanimously solve the world’s problems with a 1600-dollar check.
Unfortunately, these people, who’ve never run real businesses, have no idea how the world operates.
“There’s a fair amount of research that shows the more evenly distributed wealth is, the better for the economy/GDP growth… If everybody owned exactly the same amount of wealth, that’d be pretty healthy. Generally speaking, the more money you have, the less “efficiently” you use it. (See yachts.)” said Jones, who spent a million dollars on the campaign through his LLC and is measure 118’s single biggest donor.
There’s so much wrong with this statement that it functions as an argument against the measure in and of itself.
Obviously, equality of outcome is not the most efficient way of distributing money in an economy. Otherwise, capitalism, which distributes money where it is most efficiently used, would have already done so. Moreover, experience in the real world would dictate that governments attempting to equalize wealth always introduce unintended consequences, such as inflation.
Oregon Ballot Measure 118, in the end, is not designed to help anybody. The half-truths and obfuscations that pollute its narrative do not represent an explicit misinformation campaign – they’re simply the result of misinformed (but wealthy) idealogues attempting to formulate policy.
Out-of-touch millionaires from California have no business in Oregon’s politics, no matter how well intentioned. If the overwhelmingly negative response from Oregonians to Jones’ “ask me anything” on Reddit is any indicator, that reality will be reflected in the ballot come November.