September 26, 2001
Distributional Analysis of the 1999-2001 Oregon Kicker Refund
If the amount of Oregon income taxes collected exceeds the state economists' projections (from a forecast two years prior) by two percent or more, the entire excess is returned to the taxpayer. Individuals receive a refund check; corporations receive a tax credit. This policy is commonly called the "kicker" or the "two-percent kicker."
Related materials:
The Kicker: Permission Granted, March 5, 2001
See the most recent State Economic Forecast
Below is a chart showing the distribution of the 2001 Oregon kicker benefits. The September 2001 Oregon Economic and Revenue Forecast established that the kicker will be $254 million.
While the average kicker will be $155, the typical (median) taxpayer will receive approximately $77. The approximate median more accurately reflects what the typical taxpayer will receive; half of taxpayers will receive more than the median and half will receive less. It is impossible to calculate the median exactly without access to data from all returns, but the average of the middle income group approximates the median. Reporting the average kicker does not well represent what the typical Oregonian will receive.
The wealthiest one-percent of taxpayers will receive one-fifth of the kicker refund, and their average refund will be $3,378.
The projected kicker -- $254 million or a 6 percent refund -- will be the second largest personal income tax kicker in terms of dollar amount, and the sixth highest in terms of percent refunded.
At the same time that the September, 2001 Oregon Economic and Revenue Forecast established that the kicker tax refund for the 1999-2001 biennium will be $254 million, state economists forecast that revenues for the current biennium (2001-03) will fall about $212 million short of expenditures by the 2001 Legislature. The shortfall is likely to change in subsequent quarterly forecasts.
Oregon taxpayers will not be able to enjoy the full $254 million kicker. They will send about $35 million of the $254 million kicker refund to the federal government in the form of higher federal income taxes.
There is no corporate kicker in 2001.
2001 Estimated Kicker by Income Group | |||
| --- | Approximate Adjusted Gross Income (AGI) of Group | Estimated Average 2001 Kicker for Income Group* | Percent of Total Kicker to Income Group |
| Lowest Quintile | Below $8,000 | $5 | 0.6% |
| Second Quintile | Between $8,000 and $18,000 | $28 | 3.6% |
| Middle Quintile** | Between $18,000 and $32,000 | $77 | 9.7% |
| Fourth Quintile | Between $32,000 and $55,000 | $154 | 19.4% |
| Top Quintile | Above $55,000 | $530 | 66.7% |
| Top Five Percent | Above $90,000 | $1,222 | 38.5% |
| Top One Percent | Above $200,000 | $3,378 | 21.3% |
| *The average kicker for all returns is $155. | |||
| **The average of the middle quintile approximates the median, which is the kicker that the typical taxpayer will receive. | |||
| Source: OCPP analysis of September 2001 Oregon Economic and Revenue Forecast and 1999 ODR Personal Income Tax Statistics. | |||
Of Note