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Know Portland

Kicker

The Kicker is a unique Oregon law that says when Oregon tax revenue exceeds the state forecast by more than 2%, it must refund some of the surplus to taxpayers.

The kicker has been triggered more frequently over the last few years, with the most recent kicker surplus in 2023 amounting to more than $5 billion dollars.

The Details: When the Kicker Kicks

  1. Oregon economists forecast how much revenue the state will take in over a two-year period.1
  2. State lawmakers build a budget based on the revenue forecast.
  3. Two years later, if the state tax revenue exceeds the forecast by more than 2%, the surplus is re-distributed to taxpayers in the form of a tax credit on the subsequent years tax return.

How much does each person get?

When filing their 2023 taxes, Oregon taxpayers receive an additional tax credit that is 44.28% of their taxes paid in 2022.

Visit the Oregon tax calculator to see how big your tax credit is (Click “What’s My Kicker?” at the top of the page).

Opinion: Concerns I have with the Kicker

I personally think the kicker is regressive, harmful to the health of the state over the long-term and unfairly supports the wealthiest Oregonians.

  1. Depending on prediction is dangerous, and it’s becoming increasingly dangerous and challenging as the world becomes harder to predict. Climate change, geopolitical conflict, pandemics and epidemics, natural disasters, impending earthquakes and more make forecasting generally more challenging, and make forecasting tax revenue, which itself is greatly impacted by such events, an ambitious endeavor to say the least.

    To manage the stability of the state and ensure long-term success, we should be building systems that are robust to missed forecasts, instead of relying on them. We should be reacting to what happens - because we have no clue what it’s going to be - rather than have a predetermined outcome as we do with the kicker.

    There will be times, of course, when we over-forecast revenue and are underfunded. This could create a bust-only no-boom cycle where we struggle hard when times aren’t good and we only do okay when times are good - not really able to store up and build up when we have the wealth to do so.

  2. The Wealthiest Oregonians Get the Most Back2

    The kicker tax credit gives 2022 taxpayers back 44.28% of what they paid.

    Folks who didn’t make enough to pay taxes in 2024: no tax credit. Folks who made some but not that much: a small tax credit./oregon Folks who made a lot and paid a lot in taxes: a gigantic tax credit.

Resources

Footnotes

  1. Oregon operates on two-year budget cycles, hence the two year forecast, and the kicker would trigger at most every two years. ↩

  2. I think, but haven’t yet done the math to verify, that the tax credit is regressive (as opposed to a progressive or graduated tax). The Oregon tax code is graduated, where as one makes more, the additional marginal income is taxed at a higher rate. Since the kicker is calculated post-graduated tax application, it supplies an additional tax credit percentage-wise to higher earners, the wealthiest Oregonians. ↩