The Oregon House of Representatives recently passed HB 2541 which replaces the current inheritance tax with an estate tax imposed as a percentage of the Oregon taxable estate. The bill is the product of work by the Oregon Law Commission and includes a new table for natural resource property.
Currently an estate valued at over $1 million pays six percent and gradually increases to the maximum rate of 16 percent. The new legislation increases the minimum inheritance taxed to $1.5 million but increases the rate to ten percent up to 19.8 percent.
It’s estimated that the tax brings in abut $100 million a year from only about one percent of Oregonians. The Oregon Revenue office estimates that this new formula wouldn’t change the total amount collected by the state.
Proponents expect the bill to ease estate taxes on family farms and other resource lands. It’s unlikely that it would have much of an impact as it only excludes another half a million but increases the tax rate.
It’s more important to note that Oregon is one of only about 20 states that still taxes estates inherited after a death. The federal government taxes inherited estates after the first $5 million.
Passage of this measure would not only make Oregon’s death tax rate second in the nation but give another negative message that Oregon is not open to business and continues to impose unfair taxes on businesses and especially family-owned business. It already has the top income tax and capital gains tax rates in the nation.
The entire tax, even on over a million dollars is just plain double taxing. The businesses have been paying taxes all along. Why, when the owner dies, should the heirs be taxed, again, just for inheriting the business? Oftentimes heirs are forced to sell off portions of the estate just to pay the taxes. The American Family Business Foundation estimates that the estate tax has a substantial impact on family businesses and abolishing it could raise the probability of hiring by 8.6 percent, increase payrolls by 2.6 percent and expand investment by three percent.
It’s unwarranted tax and should be completely abolished. PHA
