Seven sensible reasons the Death Tax must be phased out:
1. Makes people pay to die — imposed at most vulnerable, emotional time.
It is a vulture tax. The tax is imposed on and paid by those who have just lost a close family member. While the family is dealing with the trauma of their loved one’s death and the complications of dealing with an estate, they must come up with the resources to pay the tax within months of the death.
2. Unfair, double tax.
It is a double tax. This unfair tax is imposed on property that the owner has already paid taxes on throughout his or her life.
3. Tramples on Oregon’s pioneering spirit by preventing families from building a better life for their children and grandchildren.
This tax is imposed on families, not corporations or businesses. So, family-owned farms, ranches and businesses are hardest hit by the tax. This is especially difficult for farmers and ranchers and capital intensive businesses. They are most often deeply invested in land, buildings and equipment, but this does not mean they have a lot of cash on hand.
4. Forces families to break up long-term Oregon businesses.
What happens? Businesses are forced to sell and farmlands must be divided up to generate cash to pay the tax. These distress sales may come at a time when the sale is not economically desirable. The family cannot sit and wait for the best deal but must take what they can get in order to pay the taxman. As a result, children and grandchildren are denied the opportunity to carry on long-term, family-owned Oregon businesses.
5. Causes out-migration of businesses and jobs; motivates successful business people to leave the state.
The death tax impairs job creation in Oregon. Most Oregon jobs are created by family-owned businesses, farms and ranches. In many cases, families purchase additional insurance or set aside savings in anticipation of paying the death tax. These are funds which could otherwise be spent to hire additional staff to increase production. Those successful Oregonians whose businesses and capital are mobile can avoid the tax simply by moving across state lines.
6. Weakens us — Oregon is one of only three states west of the Mississippi with a death tax.
The death tax discourages investments in Oregon. There are now 31 states where a person can build a business, create jobs and succeed without having to pay a state death tax. Oregon is one of only three states west of the Mississippi, and one of only 19 states that still has a death tax. A family that wants to build a business they can pass along to their children and grandchildren can go to states such as California, Arizona, New Mexico, Nevada, or Idaho and depend on their estate being left intact. In 2001, all 50 states had some form of a death tax. Since then, 31 states have done away with such a tax. The states which most recently repealed or phased out the death taxes have cited economic competition and job creation as significant factors.
7. Makes up less than 1.5% of the general fund; while the phase out would draw new investments and revenue to the state.
Oregon’s death tax causes a loss of income tax revenue because successful families to move to other states such as California, where they will not be penalized for their success. They take their businesses and investments with them, which shrinks Oregon job opportunities. They also shift from being Oregon income tax taxpayers to being non-residents, no longer paying Oregon income taxes, business taxes, and no longer making charitable contributions or supporting local arts.