Proposal would eliminate state 'death tax' by 2016
By MITCH LIES
Willamette Valley farmers Marie Bowers, Gerald Freeman and Robert Zielinski are the chief petitioners on a ballot initiative being circulated to end what is commonly referred to as Oregon's death tax.
Petitioners need to submit 87,213 valid signatures to the state's election office by early July to get the initiative on the November ballot. To date, petitioners have collected about 12,000 signatures, according to the secretary of state's office.
Oregon imposes a tax on estates with a gross value of $1 million or more. Rates start at 10 percent, and top out at 16 percent for estates valued at more than $9.5 million.
Tax credits for up to $7.5 million in property value are available for the estates of farmers, ranchers, foresters and fishermen. But Shawn Cleave, of the Oregon Farm Bureau, said the credit is a complicated program only available to some of Oregon's farms and ranches.
The estate tax, according to the website endoregondeathtax.com, is an unfair double tax imposed on property that the owner already has paid taxes on throughout his or her life. It can cause families to break up long-term Oregon businesses to generate cash to pay the tax.
"Ending Oregon's death tax is about ... sustaining the legacy and land my great-great grandpa started farming over a century ago that is my family's livelihood," Bowers, who is president of Oregon Women for Agriculture, said in a testimonial on the group's website.
The initiative would reduce the tax by 25 percent in 2013, 50 percent in 2014 and 75 percent in 2015. As of Jan. 1, 2016, the tax would be eliminated.
The initiative would also eliminate taxing property transfers among living family members.
Jody Wiser, chair of Tax Fairness Oregon, countered claims the tax is a double tax by noting that capital gains of property typically aren't taxed until they are transferred.
"When people say it has already been taxed and it is being taxed twice, that is mostly a dishonest claim," Wiser said.
Cleave said double taxation is common on Oregon estates.
"Any purchases you made that contribute to your estate, you pay taxes on as you purchase," he said. "The transfer of that at your death is another tax event, so that is a second tax."
The Farm Bureau has come out in support of the initiative petition.
"This is a simple yes for us," Cleave said.
The measure, Initiative Petition 15, is one of eight being circulated for the Nov. 6 general election.
If voters overturn the tax, Oregon would become the 30th state to do away with its estate tax.
Nationally, properties valued at less than $5 million are exempt from federal estate taxes through the end of 2012. Without congressional action, the exemption drops to $1 million at the end of the year and the tax rate will increase from the current 35 percent to 55 percent.
Rep. Kevin Brady, R-Texas, has introduced the Death Tax Repeal Permanency Act in the House. Sen. John Thune, R-S.D., has advanced a similar bill in the Senate.