Tuesday, November 29, 2005

Calling their bluff

Big editorial this week in the Oregonian about how stupid Oregon's kicker law is.

They say it is a "random, ridiculous law," and they especially disdain the corporate kicker, because most of it goes to out of state corporations, so the money disappears from our economy.

What a wonderful chance for the Oregonian to put its money where its mouth is! Guess who is an out-of-state corporation that will be getting a kicker this year? Newhouse, who owns the Oregonian.

I hereby call on the Oregonian to return, in full, the kicker they receive this year to the state government coffers.

After all, they have lamented for years the underfunded schools and other state services. They have supported every tax increase that has come down the pike. They think the kicker is bad policy? Nothing stops them from sending theirs back.

When they do it, I'll be more willing to take their constant cries for more revenue seriously.


[BTW - I do think that the kicker in its current form is not the best policy. Basing it on actual receipts compared to forecast doesn't make a lot of sense. I'd much rather see a spending limit, coupled with a rainy day fund and a mechanism that returns all tax receipts in excess to the taxpayers.]

4 comments:

The Manly Ferry said...

Even as I think the kicker counts as one the silliest budget mechanisms I've ever encountered (and for several of the same reasons; LINK), I do have to endorse your suggestion for The Oregonian good one.

And, hope you don't mind, but I think I'm going to add you to the ol' blogroll (the above link will take you to the site, but, if memory serves, you've been there before).

Jack Bog said...

Hey now, there's something we agree on!

Anonymous said...

OK ... would you go for a spending limit with no rainy day fund, and that returns the excess to taxpayers? I would.

I get a kick out of the language here because, personally, I find the actual rain here less frequent and problematic than the seemingly perpetual "shortfall" - that always rains on politicians' spending plans - whether it is caused by PERS, PPFDRF, CIM/CAM, Tram, Other Urban Renewal / Corporate Welfare, Union Contracts, or any other overspending scheme.

gus miller said...

The Oregonian has editorialized in past years for Oregonians to donate their kicker refunds to public school foundations.

Excerpts from a Sept. 09, 2005 Oregonian article by Jim Mayer makes a strong case for at least eliminating the corporate kicker:

"For corporations, it's (the kicker) a different story. The 2003 estimate was $540 million. The state collected $641 million. The corporate kicker comes in the form of a 36 percent credit against 2005 tax liability.

Estimating corporate profits -- and therefore the taxes corporations will owe two years ahead -- is a tricky business. In 1997, corporations got a $202.7 million tax cut because the state misjudged the huge run-up in the stock market. In 2003, tax collections were $439.5 million less than expected because analysts didn't see the recession coming.

'There's going to be a very high probability of a corporate kicker anytime things are slightly better than you think,' said Michael Kennedy, revenue economist for the Office of Economic Analysis, the agency responsible for the kicker calculations.

Corporations have the ability to adjust their(federal and state) bottom lines by choosing which years to report income and costs to lower their tax bills. Armed with the knowledge that their tax liability will be reduced this year by 36 percent, corporations can shift profits into 2005 to take advantage of the break."