Saving the Kicker

To say that Democrats are fond of taxes is like saying bees are fond of nectar. It is their nature. So fond of taxes are they that they have tried to change the English language in order to avoid the distaste of the electorate for tax increases. Today, for Democrats, any action that reflects a reduction in the amounts to be taxed is considered a “tax expenditure.” It connotes that all the income that is earned belongs to the government – well I mean the government when the Democrats are in charge – and any that is left for the people who earned the income is a government expenditure. That makes earned income the equivalent of welfare income – both provided by the government. (It is not unlike when Democrats, tired of the low acceptance of the designation as “Liberals” sought to change their identities – but not there political philosophy – to “Progressives”.)

If that appears to smack of socialism, that’s because it is. Long gone in the Democrat Party are the former lions of working class families and supporters of capitalism. Former leaders like Presidents Franklin D. Roosevelt, John F. Kennedy, and Lyndon Johnson, Senators like Frank Church, Mike Mansfield and Russell Long, and Representatives like Thomas (Tip) O’Neill, Sam Rayburn and Dan Rostenkowski would no longer be welcome at a gathering of the new Democrats. Instead we have avowed socialists like Sens. Bernie Sanders, Elizabeth Warren, and Kamala Harris, and newbies like Alexandria Ocasio-Cortez, Julia Salazar, and Andrew Gillum.

One of the great frustrations for the Democrat Party in Oregon in its endless quest for more money, more irresponsible spending and less accountability was the passage of a ballot measure in 2000 to enshrine the “Oregon Kicker” in the state constitution. (Prior to that the legislature had created the Oregon Kicker as a state law in 1979; one that the legislature could choose to ignore at its will.) But a little background.

In the budgeting process, the Oregon legislature uses “revenue estimates” to determine the amount of money available to spend in the ensuing biennium. Like virtually everything else in the budgeting process the legislature relies on a formula that assumes past revenue adjusted for growth (inflation, population, gross domestic product and changes in revenue producing laws). It’s a crapshoot but it is probably the best that the legislature can do. There is a bias to underestimate revenue based on the undesirable outcome of coming up short of revenue in any given fiscal year. Underestimating the amount of revenue to be produced has the desirable effect of winding up with a surplus in any given year with a corresponding undesirable effect of having overtaxed Oregonians. However, the legislature – prior to 1979 – never gave the money back. Having overtaxed Oregonians the legislature – Democrats and Republicans alike – kept the money and simply increased its spending in the ensuing years.

None were more anxious to do that than the Democrats and never more so than in the last three decades. After all, under their prevailing philosophy the revenues were theirs and they knew better how to spend it than did the people who earned it. The Oregon Kicker, when adopted, required the return of those amounts that exceeded the 2% threshold for personal income taxes paid. So routine was the excess revenue that between the first adoption of the kicker in 1979 the law required return of excess revenue in eleven of the nineteen biennia. The total amount refunded to individual and corporate income taxpayers has been $3.43 Billion.

That’s $3.43 Billion that the legislature wasn’t able to spend on increased public employee benefits, on increasing the baseline for future growth in spending (continuing service level – CSL – budgeting) and programs that have been proven disastrous over time. Many of these programs failures were based on Democrats believing that they were smarter than everyone else – CIM/CAM ($7.5 Billion over 15 years), the Columbia River Crossing ($185 Million over a decade to provide light rail and bike paths but no additional lanes of traffic), Cover Oregon ($300 Million to implement Obamacare that never registered a single beneficiary) and the list can go on indefinitely.

Currently the Oregon Kicker is one of the few tools available to taxpayers to limit spending by the Democrats-in-charge. It is one of the few instances in which the law recognizes that revenues for government are the taxpayers’ revenues. And, despite the insistence of the Democrats, returning excess taxpayer revenue is not a “tax expenditure.” And that is precisely why the Democrats are pursuing initiatives to end the Oregon Kicker – it’s in their way.

But the good news is that any attempt to eliminate or change the Oregon Kicker requires a vote of the people – it would be a change to the constitution. So if you want to retain one of the last vestiges of taxpayer protection, you will resist the Democrat’s initiative.

But if you don’t pay taxes, or you are one of the growing number of Oregonians who are dependent in whole or in part on the state government, what can I say?