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The ballot for this fall’s November general election
may be complicated. To date, forty four initiative
petitions and two legislative referrals have been
filed with the Secretary of State. Fourteen of the
initiative petitions have already been approved to
circulate for signatures.
Two of those initiative petitions should be of
significant interest to all Oregonians who own
property. Initiative Petition five would prohibit
the imposition of real estate transfer taxes.
Initiative Petition fifteen would phase out all
existing Oregon estate and inheritance taxes.
A real estate transfer tax is a tax imposed on the
privilege of transferring the ownership of real
property within the jurisdiction of a state, county
or municipality. The transfer tax is separate, and
in addition to, any capital gains tax due on the
increased value of the property.
The transfer tax can be applied in a variety of
ways. Most commonly, the tax is levied as a
percentage of the gross sales price of the real
estate, regardless of whether or not the sale
resulted in a profit for the seller.
Another often used method is to apply a graduated
charge for the privilege of recording the change of
ownership. That charge is usually based on the gross
amount of the sales price.
Either way, a real estate transfer tax represents a
sales tax on the gross sale of real property.
Initiative petition five amends Article IX of the
Oregon Constitution to prohibit any Oregon
government entity from imposing a tax, fee, or other
charge upon the transfer of any interest in real
property. It also repeals any tax, fee or assessment
that became operative after December 1, 2009.
An estate or inheritance tax is often known as the
death tax. It is imposed on the taxable value of an
estate when the owner dies. The combined State and
federal death taxes can reach more than half the
taxable value of an estate.
It is practically impossible to raise enough cash to
pay the tax without jeopardizing the financial
viability of the estate. Too often, small family
businesses and farms must be sold in order to pay
the governments’ confiscatory death tax.
Oregon is one of only twenty states that continue to
levy a death tax. Many other states have wisely
abolished the unfair and unproductive form of double
taxation.
They have recognized that not only does the tax
cause the destruction of many family farms and
businesses, but it also results in capital leaving
the state. Older people tend to move to states
where, when they die, they are able to pass their
property and wealth to their children unencumbered.
The combination of the loss of businesses and jobs,
plus the flow of capital out of states that levy
death taxes, is counterproductive to the economic
stability of the state. For instance, Tennessee
recently abolished their death tax, when they
determined, that the tax only produces about $75
million per year, but has caused the loss of $7
billion in sales, income, property and other tax
revenue over the past decade.
Initiative petition fifteen is called the Death Tax
Phase-Out Act. It defines a death tax as any tax
imposed on the estate of a decedent, any inheritance
tax, or any transfer of property where the transfer
is a result of the death of a person.
The Act states that neither Oregon nor any other
unit of government in Oregon shall impose a death
tax. Starting in 2013, it reduces the current estate
tax by 25% each year until it is totally phased-out
by 2016.
I strongly support both of these initiative
petitions. In my view, they will eliminate unfair
and unproductive forms of double taxation.
I will sign both of these petitions and I hope that
you will too.
Please remember, if we do not stand up for rural
Oregon, no one will.
Best regards,
Doug
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