Measure 118 Defeated for the Wrong Reason

Measure 118 was a universal income policy. Oregon Democrats were officially in opposition to this robust welfare program. Why?

Before I answer that, let me give you the right reasons someone might have voted no on Measure 118. I’ll provide the biggest three.

First, there is little evidence people need more public assistance. Taxpayers are already burdened by a nontrivial amount of social spending at both the federal and state level. If you live in the jurisdiction of Portland, that includes the local level.

Second, as a universal entitlement, Measure 118 was not means tested. It wasted too much money sending checks to wealthy people, an inherently inefficient program design.

Third, it taxed gross income. Most taxpayers that effectively have no income have a gross income liability. While it’s generally better to tax consumption than income, if you’re going to tax income, tax net income, not gross income.

I’m sure at least one of these observations was the reason almost half of the votes against Measure 118 were cast. But that would not have been enough votes to defeat it.

Democrats opposed Measure 118 for a different reason: it cut out public employees. Most public assistance is delivered to poor people from taxpayers in a leaky bucket that funds all kinds of cushy jobs administering a program along the way. Those middlemen are the base of the Oregon Democratic Party.

Cutting out wasteful administrative costs was one of the better features of Measure 118. That’s worth noting because: What if we took all the money currently devoted to public assistance and just cut people a check? Edging out the middlemen would allow for either higher payments to the poor than we already have or the same level of support but with a lower taxpayer burden.

Eric Shierman lives in Salem and is the author of We were winning when I was there.