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Get a raise? Pay more for your latte

Steve BucksteinQuickPoint!

Oregon taxpayers soon will receive checks in the mail representing 18.6 percent of their 2006 personal income tax payments. This kicker refund results from the Oregon law that says if state economists underestimate revenue by two percent or more, the excess must be returned to taxpayers.

Some argue that the kicker money should stay with the state. Why? Because as long as any Oregonian has a “need” for that money—be they school children, the elderly, the disabled, etc.—then it should go to them instead of back to the individuals who earned it.

Of course, this is the Marxist “from each according to his ability, to each according to his need” justification. Taken further, the state could retroactively come after even more of your previous income if anyone else “needs” those funds.

One way to look at this argument is to think about walking into your favorite coffee shop and ordering a $3 latte. The price is posted on the wall, but the person behind the counter asks you a question before accepting your order. “Did you get a raise last year?” “Yes,” you tell her proudly, “I was very productive last year and my boss gave me a 10 percent raise.” “That’s great,” she replies. “The $3 latte will cost you $3.30.” “Why?” you wonder. “Because your ability allows me to better meet my needs.”

You wouldn’t accept this argument from your barista, and you shouldn’t accept it from your government.

Steve Buckstein is Senior Policy Analyst at Cascade Policy Institute, a Portland, Oregon-based think tank.

© 2007, Cascade Policy Institute. All rights reserved. Permission to reprint in whole or in part is hereby granted, provided the author and Cascade Policy Institute are cited. Contact Cascade at (503) 242-0900 to arrange print or broadcast interviews on this topic. For more topics visit the QuickPoint! archive.

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