In almost the same breath that state officials announced that an average Oregon taxpayer may get a $850 kicker tax rebate, they were hinting at changing the kicker.
Oregonians are in for a record kicker rebate because nobody could very well predict the pandemic’s economic impact. The kicker law requires very good guesses about revenues by state government or it kicks.
The kicker kicks “if actual state revenues exceed forecasted revenues by 2% or more over the two-year budget cycle. The excess, including the 2% trigger amount, is returned to taxpayers through a credit on their following year’s tax return.”
Oregon is the only state with this kind of law. It is one way, not the most artful way, of keeping a lid on government spending. And voters approved it.
It gets criticized because people who are wealthier tend to benefit more.
You get money kicked back to you based on the taxes you paid. Lower-income people may need a big kicker rebate more, but they get less.
That is an interesting argument because Oregon’s income tax system is progressive. So people who earn more pay more in taxes.
So if Oregon were to change the kicker so lower-income people would benefit more from the kicker, would that be a doubly progressive tax system? That may make sense to some.
There also have been proposals to channel kicker money instead to important matters Oregonians need, such as providing more child care or helping to create more affordable housing.
Those are great causes. We’d rather see the money go directly into people’s hands and let them decide how it is spent, instead of having the government decide for them.
Treasure your kicker, if you are fortunate enough to get one for the 2021 tax year. It may be the last of its kind.