Distributional Analysis of the 2001 Oregon Kicker

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Distributional Analysis of the 2001 Oregon Kicker

InsideCapitolDome

Distributional Analysis of the 2001 Oregon Kicker

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.”

Below is a chart showing the distribution of the 2001 Oregon kicker benefits, based on the May 2001 Oregon Revenue Forecast.

  • While the average kicker will be $217, the typical (median) taxpayer will receive approximately $106. 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 ten percent of taxpayers will receive about one-half the kicker refunds, and their average kicker will be $1,080. The wealthiest one-percent of taxpayers will receive one-fifth of the kicker refund, and their average refund will be $4,443.
  • The projected kicker — $355.1 million or 8.4 percent refund — will be the second largest personal income tax kicker in terms of dollar amount, and the fourth highest in terms of percent refunded.
  • Oregon taxpayers will not be able to enjoy the full $355.1 million kicker. They will send about $50 million of the $355 million kicker refund to the federal government in the form of higher federal income taxes.
  • The corporate kicker, estimated today at $22.5 million — will primarily benefit a handful of corporate taxpayers. Twenty-six (26) corporations will reap 36 percent of the corporate kicker, averaging $307,000. Only Eighty-four (84) corporations will receive 51 percent of the corporate kicker. To put these numbers in perspective: approximately 38,000 corporate tax returns will be filed for tax year 2000.

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 $7 0.6%
Second Quintile Between $8,000 and $18,000 $39 3.6%
Middle Quintile Between $18,000 and $32,000 $106 9.8%
Fourth Quintile Between $32,000 and $55,000 $213 19.7%
Top Quintile Above $55,000 $719 66.3%
Top Ten Percent Above $70,000 $1080 49.8%
Top One Percent Above $200,000 $4,433 20.4%
*The average kicker for all returns is $217.
Source: OCPP analysis of May 2001 Revenue Forecast and 1998 ODR Personal Income Tax Statistics.
OCPP

OCPP

Written by staff at the Oregon Center for Public Policy.

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