Decision 2012: Fair tax on estates – or ‘Death Tax’?

More than 30 states have repealed the estate tax, and Oregon could be next, if Ballot Measure 84 passes.

It’s a one-time tax on estates exceeding a million dollars – assessed after you die. Supporters say the measure affects your parents and grandparents who’ve saved their entire lives. Opponents say repealing the tax will only help the super wealthy.

“I think about a lifetime, paying off your house and having some savings and maybe even some business assets, you can get to a million dollars pretty quickly,” said Tim Knopp, a candidate for the state Senate who wants the repeal.

“This is really what we are talking about,” he said. Our parents and grandparents who’ve done the right thing, saved their entire lives. And we are going to punish their success because the state wants some of their money. I don’t think that’s right.”

Many parents want to give their kids their inheritance when they die, but if they have over a $1 million estate, the state taxes them.

And that’s roughly about 2 percent of Oregonians.

“Most of the kids aren’t millionaires,” Knopp said. “They are struggling to get by, just like all the rest of us are.”

An estate includes small businesses, family farms, even savings accounts.

“It provides another way of transferring wealth and squeezing the middle class tighter and creating a bigger gap between the wealthy and the not so wealthy,” said Geri Hauser, Knopp’s Democratic challenger in Senate District 27.

Hauser see the measure to repeal the estate tax as another tax loophole.

“Every two years ,it will take away $240 million out of the budget,” Hauser said. “That’s the equivalent of laying off 1,200 school teachers.”

But Knopp says more people will move out of the state if what critics call the “Death Tax” is not repealed.

“Fewer taxpayers will be paying income taxes here,” Knopp said. “That will end up being lower revenue for schools, public safety — things that people really care about.”

The estate tax does not apply to property inherited by surviving spouses or up to $7.5 millions in farm, forest or fishing property used in business.

“At a critical time, when we are struggling with our budget right now, I just don’t think this is the right time to be giving more big breaks to large corporations and the super-wealthy,” Hauser said.

Opponents say Oregon legislators already have cut school funding by 5 percent while the amount of tax breaks has increased by 12 percent.

If Measure 84 passes, the estate tax will be phased out over the next three years.

But if you vote no, that keeps the tax in place as it is.