This West Coast blue state could be the first to tax big companies and send the extra cash to its residents — guaranteeing basic income for all. Do you think it’s a good idea?

The great rebate debate

In typical Oregon fashion, Measure 118 traces its roots to a coffee shop huddle and is the brainchild not of a political think tank but a former neuroscientist-turned-organizer. Antonio Gisbert started the petition that created the ballot question and it took him about six years to reach this moment of truth.

“Only when we are all successful will we have justice with like a Capital J,” he told Willamette Week back in July.

But the Oregon Rebate has also sparked outrage with a capital O. Democratic Governor Tina Kotek may have brought self-service gas to the masses but she’s not about to fuel this effort, claiming it “would punch a huge hole in the state budget and put essential services for low-wage and working families at risk.”

Legislative leaders in both parties, most of Oregon’s major labor unions and nearly all its major business organizations also oppose it.

Gisbert, however, remains unfazed.

"It kind of does seem a little bit like some of these elected [officials] are more beholden to corporations and corporate interests than they are to the interests of everyday Oregonians," he told Business Insider.

But Gisbert and his fellow grassroots supporters have their work more than cut out for them. By one estimate, their opponents are ahead with a fundraising ratio of 30-to-1.

Discover how a simple decision today could lead to an extra $1.3 million in retirement

Learn how you can set yourself up for a more prosperous future by exploring why so many people who work with financial advisors retire with more wealth.

Discover the full story and see how you could be on the path to an extra $1.3 million in retirement.

Read More

Rebate or reboot?

Though the notion of redistributing corporate gain to heal economic pain has obvious appeal, Measure 118 has pronounced flaws. While supporters cast rich corporations as the enemy, the fact is that wealthier folks would get the rebate as well. So any argument that the law would act as a weapon against poverty doesn’t quite hold water.

Also, a 3% tax hike has a much more dramatic bottom-line impact on businesses when you examine it closely. Buried in the 24-page document that describes Measure 118, you’ll find numbers to make many merchants lose their lunch, caviar or otherwise.

Currently, operators with state sales of $70 million pay minimum taxes of either $150 (for an S-corp) or $50,000 (C-corp). But if voters approve the measure, those minimums would super skyrocket to $1.4 million.

As any first-year MBA student knows, tax-walloped companies tend to take their business elsewhere. Oregon already ranks 28th among all states for its business tax climate, according to the Tax Foundation.

So if it passes, Measure 118 would come just in time to help a flummoxed CEO buy a first-class plane ticket to neighboring Nevada, which places seventh among the top ten states for business tax climates.