Why Some Wealthy Taxpayers Are Getting Big State Tax Refunds

Conservatives say individuals should save money for the future. States should do the same. We now we will have economic downturns, when state revenues will decrease exactly when they are most needed. Schools, road repair, law enforcement, etc. will still be needed. But because the state did not save money in better times, they will make cutbacks in needed areas when the economy turns down.

The median is the point at which half lie below that point, half above.

Fiscal Times

By Beth Braverman
September 25, 2015

Imagine if the government returned some of your tax money during years when the economy was strong and their coffers full.

It’s actually happening in several states that have so-called tax-trigger policies aimed at keeping a lid on government growth. Among the states paying back residents this year are Colorado, North Carolina and Oregon, according to a Bloomberg report.

Seven states have such policies, and another four are considering implementing them. Critics worry that sending back excess cash could leave the states without reserves in the event of another recession. They also point out that the bulk of the cash goes to the wealthiest taxpayers, who likely paid the most in taxes in the first place.

In Oregon, for example, the state will credit taxpayers more than $400 million on their 2015 returns, with a median credit of $124 -- and a credit of $4,614 for the top 1 percent.
[So half the taxpayers will get a credit of $124 or less, in order to allow a credit of $4,614 for the top 1 percent.]

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