September 16, 2012
Oregon Is Latest State to Consider Estate Tax Repeal
Wall Street Journal editorial, Oregon's Death Tax Defiers:
Small business owners and farmers have been some of the hardest hit by the tough economy, and those who stay afloat increasingly worry they won't be able to pass on their enterprises to the next generation. In liberal Oregon, of all places, a measure will be on the ballot this November to ease the burden by eliminating the state's death tax. ...
Under current Oregon law, the tax kicks in at 10% on estates worth a mere $1 million and rises to 16% on estates of $9 million. That hits many family-owned businesses and farms that wouldn't qualify as rich even in Elizabeth Warren's book of envy. ...
Critics of the repeal initiative, known as Measure 84, claim the phase-out over three years will hurt the state's general revenue fund and thus money for education or welfare. But death tax revenues make up less than 1.5% of Oregon's general fund—roughly $100 million of the $7.5 billion annual budget.
Oregon is merely the latest in a wave of states that are considering or have repealed their estate levies. In 2001, all 50 states had death taxes. By this summer 31 states had taken those taxes off their books, including most recently Tennessee, which is phasing out its tax over several years, and Ohio, which will eliminate its tax in January. ...
[T]he standard liberal argument [is] that the estate tax hurts no one but the rich. Its biggest targets are family businesses, entrepreneurs and professional households that have saved over a lifetime, and that have already paid taxes on their income once or even two times. By punishing them, the economy suffers and so does everyone else.
The best reason to repeal the death tax is moral: It punishes a lifetime of thrift for the inevitability of death and no purpose but punishment.
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The best reason to KEEP the estate tax is moral. In a very small way, it retards the increasing concentration of wealth at the very top of the income scale.
The WSJ editorial is logic-free, relying instead on political jargon. No one has ever shown that "family businesses, entrepreneurs and professional households" are "punished" by the tax, or that the tax hurts the economy. There's never been a documented case history of job losses as a result. Any business worth its salt is well-prepared for the death of the owner through a variety of simple techniques that are well known, I'm sure, by the tax lawyer here. It's not surprising, however, that he's parroting the political line that would be pleasing to his wealthy clients.
Posted by: Steve Robinson | Sep 16, 2012 1:13:05 PM
From the first sentence this letter is full of inaccuracies. Just this Sunday the Oregonian carried an article titled "Oregon farm profits show strong growth." Farm revenue nearly doubled in 2011 over 2010 according to the state Department of Agriculture. And farms families are largely exempt from the estate tax in Oregon, with up to $15 million per family passing tax-free if the family will continue the business.
And ask Oregon's 540,000 school kids if losing only 1 1/2% of the states' revenue - or another 1200 teachers - is a minor thing to them and their families.
Further, the article doesn't mention section 4d of the measure that creates a capital gains loophole which means that the rich will avoid income taxes both alive and dead if this measure passes.
Posted by: Jody Wiser | Sep 17, 2012 10:06:43 AM