To the editor:
Sho Dozono’s heart is in the right place (“Kick your kicker back to Oregon” 11/27/2001), but his accounting is off-base. The kicker will be a net drain on Oregon’s economy, rather than a stimulus.
The $254 million is not new money. This money will have the same multiplier effect whether spent by individual taxpayers or by the state: increased consumer spending is offset by decreased state spending.
This Letter to the Editor appeared in The Portland Tribune on Tuesday, December 4, 2001, responding to an opinion written by Sho Dozono.
But, since Dozono and others will be sending $35 million of their kicker to the federal government in federal income taxes, the total money circulated in Oregon will be less. Furthermore, consumer spending cannot draw federal matching funds to Oregon as state expenditures often do.
The richest five percent of Oregonians, with average taxable incomes of $254,000, received nearly 40 percent of the kicker refund. These households already make far more than they spend in a year, and their refunds will not change that. If recent federal tax rebates offer any guidance, the money will wind up in the bank, unspent, regardless of Sho’s pleas.
To benefit Oregon’s economy, we should have stopped the kicker tax cut. That time has sadly passed.
Jeff Thompson is an economist and policy analyst with the Oregon Center for Public Policy.
Related Material:
View Mr. Dozono’s opinion here.
