Lawmakers at the state Capitol building, which is under construction, have an opportunity to ensure the kicker helps the poor. (Amanda Loman/Oregon Capital Chronicle)
This is the year when progressives in Oregon stopped trying to abolish the state’s tax kicker and began to figure out how to live with it. Their ideas chart a path that could resolve the decades-long conflict over Oregon’s most loved and hated tax policy.
Progressives at the Oregon Center for Public Policy have argued strenuously over the years that the kicker credits the state refunds to taxpayers could be better spent on services for Oregon’s poor and working families. But, this year, the center abandoned that position. Bowing to reality, it now says it would be okay to have this year’s $3.9 billion kicker go back to taxpayers, provided the state’s poor and working families get a larger share.
I’m glad to see the center chart a new approach to this issue. It’s not a complete 360-degree reversal of their old position. It’s more of a tactical 180 which recognizes that Oregonians aren’t about to give up their kicker. They voted it into the constitution, and there it will stay until overturned by a popular vote. So, the only hope for a progressive reform of this infamous feature of Oregon’s tax policy is to mend it, not end it.
Progressive spent many election cycles and legislative sessions testing “better use” arguments against the kicker. Don’t our kids need it more (when our schools were cutting school days)? Or how about those poor families unable to access the Oregon Health Plan (when the state still used a lottery to award slots in that program)?
None of these arguments resonated with anywhere near a majority of voters. And, when the economy improved in the last decade and funding for schools and human services improved, the end-it arguments lost what little sway they had with both voters and lawmakers.
That’s why I appreciate the center’s new proposal to live with the kicker: If we’re going to give the money back, let’s give it back in ways that benefit those who need it most – Oregon’s poor and working families.
That’s a popular purpose. It also fits with the left’s desire to make our tax code more progressive and with the right’s insistence that giving money to people is better than funding programs for them.
Here’s how the center says its “Working Families Kicker” would work:
“(T)he benefits…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.”
That’s a redistribution scenario that plays well in Democratic precincts. But there’s also an element of the Republican party talking about paying more attention to working families and losing patience with the social agendas of large corporations and wealthy elites. So why not use the kicker to give an extra boost to working families and small businesses at the expense of the super-rich, as the center’s proposal would do? It would also shift more kicker dollars from blue counties to red counties and provide outsized benefits to rural communities throughout the state.
Republicans, are you listening?
The mechanisms for changing the kicker in this manner are complicated, but it would be doable on a one-time basis with a two-thirds vote of both legislative chambers. And perhaps the Republican Senate leader who is pushing to restore the old practice of sending kicker checks at Christmas time will take notice of what bipartisan gift giving could accomplish in this form.
I don’t think the proposal will gain sufficient traction in this legislative session. It’s too new and a bit complicated. For now, it’s a good talking point. But, as its benefits become known, it’s going to get more attention at kitchen tables around the state.
This is an idea whose time can come, if progressives learn to live with the kicker as a limit on government spending and conservatives learn to recognize the benefits of a populist tax policy for their constituents. If we have to go back to the voters with a proposal to change the kicker, I’d bet my next tax refund that this idea would win their support.
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