The 2001 Kicker, an update

InsideCapitolDome

The 2001 Kicker, an update

InsideCapitolDome

The 2001 Kicker, an update

“In Oregon, where the women are strong and the men are good looking, the typical taxpayer is about half-average.”

While the average kicker under SB 963-A (the bill that passed the Senate today that will take the federal Medicaid Upper-payment Limit funds out of the kicker calculation) will be $142, the typical taxpayer — the median taxpayer — will receive approximately only about $75 . See the attached distributional analysis, which also shows what the average and typical kicker would be if SB 963-A is not enacted.

The OCPP’s figures are higher than those published by the Department of Administrative Services’ Office of Economic Analysis. The OCPP uses 1998 tax data and projects 2001 tax data using the method used by the Legislative Revenue Office; DAS-OEA uses the 1998 tax data and does not attempt to update it to a more current year.

Reporting the average kicker does not well represent what the typical Oregonian will receive. The approximate median more accurately reflects what the typical taxpayer will receive. It is impossible to calculate exactly the median without access to data from all returns, but the average of the middle income group approximates the median.

Additional information about the kicker under SB 963-A:

  • The wealthiest ten percent of taxpayers will receive about one-half the kicker refunds, and their average kicker under SB 963-A will be $758. The wealthiest one-percent of taxpayers will receive one-fifth of the kicker refund, and their average refund will be $3,110.
  • The projected kicker under SB 963-A — $249.1 million — will be the second largest personal income tax kicker, in terms of dollar amount, in history.
  • Oregon taxpayers will not be able to enjoy the full $249 million kicker. They will send almost $35 million of the kicker refund to the federal government in the form of higher federal income taxes. SB 963-A lowers the amount of dollars Oregonians will send to the federal government in higher federal taxes.
  • The corporate kicker, estimated at $22.5 million, will primarily benefit a handful of corporate taxpayers and is not changed by the vote on SB 963-A. 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.
  • If the Legislature pays the federal retirees out of this biennium’s revenues (estimated payment is $111 million), the estimate of revenues exceeding the close of session forecast will fall below the 2 percent threshold, if the revenue forecast stays on course through the September “Close of Session” forecast. The threshold is $182.2 million.

2001 Estimated Kicker by Income Group

Approximate Adjusted Gross Income (AGI) of Group Estimated Average 2001 Kicker for Income Group (status quo)* Estimated Average 2001 Kicker for Income Group (removing MUL funds SB 963-A)* Percent of Total Kicker to Income Group
Lowest Quintile Below $8,000 $7 $5 0.6%
Second Quintile Between $8,000 and $18,000 $39 $27 3.6%
Middle Quintile Between $18,000 and $32,000 $106** $75** 9.8%
Fourth Quintile Between $32,000 and $55,000 $213 $150 19.7%
Top Quintile Above $55,000 $719 $504 66.3%
Top Ten Percent Above $70,000 $1080 $758 49.8%
Top One Percent Above $200,000 $4,433 $3,110 20.4%
*The average kicker for all returns is $217. Excluding the MUL funds, the average kicker is $142.
**The average of the middle quintile approximates the median, which is the kicker that the typical taxpayer will receive.
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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