Oregon's tax revenue system is slightly more volatile than the all-state average, but less than some critics think based on a new study by Pew Research. One volatile element not included in the Pew assessment is the personal income tax kicker, a unique and quirky procedure that rebates to taxpayers money that exceeds projected revenues by two percent or more.
According to Pew, Oregon's state tax regime volatility rating is 6.4 percent, compared to an all-state average of 5 percent. The most volatile state tax regimes are ones heavily dependent on severance or extraction taxes. Alaska has the most volatile state tax system at 34 percent.
Oregon depends heavily on personal and corporate income tax revenues, which rise and fall in concert with broader economic trends. When times are good, Oregon's income tax system generates a growing pot of money.
If times are too good, Oregon's personal income tax kicker is triggered, requiring a chunk of incremental revenue to go back to taxpayers.