Note: The paper was updated on September 19, 2023 to capture data from a new revenue forecast and additional data provided by the Oregon Office of Economic Analysis.
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 $5.6 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. The Working Families Kicker would send every Oregon tax filer an equal amount, resulting in most Oregonians getting bigger tax rebates, helping families make ends meet.
The Working Families Kicker delivers bigger rebates to most Oregonians
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 simple change would increase the kicker for most Oregonians and make a big difference for those struggling to make ends meet. Under the Working Families Kicker, a significant majority of Oregon tax filers would get a bigger kicker than they would under the current system. The boost would make a big difference for the typical Oregonian.
Under the current kicker, the typical Oregonian – the Oregonian in the middle – would get an estimated $980. But under the Working Families Kicker, that same Oregonian would receive about $2,100. For the lowest-income Oregonians, their kicker would rise from an estimated average of $70 to $2,100. This is an amount that can make a meaningful difference in a family’s life, such as catching up on the rent or bills.
Those who don’t need more money would see smaller kickers
The bigger kicker rebates for most Oregonians have to come from somewhere, and they would mainly come from the massive kickers that otherwise will flow to the very richest Oregonians. The average member of the top 1 percent, who averages more than a million dollars in a single year, is forecast to get $44,600 under the current kicker law. Some ultra-rich people are expected to receive kicker rebates well in excess of $800,000. Under the Working Families Kicker, the rich would still receive a kicker payment. It’s just that they would be on equal footing as all other Oregonians, with a $2,100 kicker.
The shift from higher-income to lower- and middle-income Oregonians would mean the top 20 percent would go from receiving an estimated 67 percent of the kicker to a rational 20 percent. The lowest earning 80 percent of Oregonians would shift from sharing 33 percent of the kicker to 80 percent of the kicker.
It’s time to make the kicker work better for Oregonians
With a $5.6 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. At a time of rampant income inequality, it’s a mistake to send huge kickers to the rich. That is why the Oregon legislature should immediately hold a special session and — 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.
With many families struggling to make ends meet and income inequality rampant, now is the time to enact the Working Families Kicker.