[This op-ed was originally published in the Portland Business Journal]
As working families across Oregon struggle with rising costs and meager wages, Oregon is on course to send massive tax rebates to the richest Oregonians. A record-shattering $3.9 billion “kicker” rebate appears to be on its way. The rich will get huge rebates, while low- and moderate-income Oregonians get little or nothing.
It doesn’t have to be this way. A better kicker is possible. That’s why the Oregon legislature should vote to suspend the kicker. It should then pass a bill to create a more just tax credit, the Working Families Kicker.
The Working Families Kicker would make a simple change to the current kicker law. Instead of doling out the kicker proportionately to tax liability, the kicker would be sent out in equal amounts to all tax filers. This would increase the kicker for most Oregonians and make a big difference for those struggling to make ends meet.
Although estimates of who will get how much from the projected $3.9 billion kicker are not yet available, the benefits of the Working Families Kicker can be seen when applying it to the most recent kicker totaling $1.9 billion issued in 2022. For that kicker, the typical Oregonian — the Oregonian in the middle — received an estimated $420. Had the Working Families Kicker been in place then, sending out equal kickers to all tax filers, the typical Oregonian would have received a kicker worth $850. For the lowest-income Oregonians, their kickers would have risen from an estimated average of $30 to $850. This is an amount that can make a meaningful difference in a family’s life, such as catching up on the rent or other bills.
The bulk of the kicker rebates currently flow to the very richest Oregonians. The average member of the top 1 percent, who makes more than $480,000 per year, received nearly $17,000 with the kicker issued in 2022. Some ultra-rich people saw kicker rebates topping $100,000. Under the Working Families Kicker, the rich would still receive a kicker payment. It’s just that they get the same as all other Oregonians.
With a $3.9 billion kicker on the horizon, now is the time to make the kicker work better for Oregonians, many of whom are struggling to pay the bills. The 2023 Oregon legislature should — with the requisite two-thirds majority — vote to suspend the kicker, as the Oregon Constitution allows. It then should pass a bill to create a more just tax credit that mirrors the design and function described above.
The current kicker law does nothing to address our most deep-seated economic problems: the economic insecurity so many families face and vast income inequality. Now is the time to look for new solutions. Now is the time to enact the Working Families Kicker.