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Estate tax must be repealed
Capital Press Editorial
Capital Press Editorial
March 26, 2009
Many of our readers well know the old adage, "I'm from the government, and I'm here to help you." That's when most people get nervous. Whether it involves the federal, state or local politicians, many times the government-sponsored solution can be as bad as the government-caused problem.
Or worse.
One example: In 2007 the Oregon Legislature came up with a formula to exempt some natural resource-based estates valued at up to $7.5 million from the state estate tax. Fair enough, but the vague language left many folks scratching their heads.
The following year, the Legislature cleaned up the language - and added a requirement that at least half of the estate be resource-based. As a special twist, legislators made the 2008 change retroactive to May 1, 2007.
The result was 14 families received estate-tax bills totaling $480,000. In some cases, the bills were received after the estates had been probated.
Legislators are now considering another fix for this law. Our only hope is that this one won't be even worse.
As they do that, we humbly offer a suggestion. Instead of endlessly monkeying around with the estate tax to try to make it sensible, why not simply repeal it altogether? And while they're at it, legislators should give those 14 families their money back.
The unfairness of estate taxes is unequivocal. When someone dies, the government lays claim to a portion of his or her property. Depending on the size of the estate, the tax bill can be in the tens of thousands of dollars or even higher.
This hearse-chasing form of taxation has forced many a family to sell off the farm or borrow huge sums of money to make the tax collector happy.
In the case of Oregon's mixed-up mess, one family received a $42,000 estate tax bill. Another received a bill of "upwards of $40,000," and another got off light with a bill of "only" $24,055.
For years, small-business and farm organizations such as the American Farm Bureau Federation and its state affiliates have pleaded with the state and federal governments to repeal this despicable tax.
Government operatives like the estate tax because the true "victim" cannot defend himself - he's dead. That leaves only grieving family members to try to sort through the tax bill as the departments of revenue lick their chops.
Accountants argue that estate taxes address the higher basis value for property and investments that is caused when they pass from one generation to the next.
That, of course, is an argument only an accountant can love. In actuality, the state and federal governments will continue to enjoy the ability to tax that property. They'll get their money; they just won't get it in a lump sum like they do through the estate tax.
Government operatives will tell you that every dollar they can scrape together, including the estate tax, is much-needed in these difficult economic times.
What they can't explain is why they think they deserve a slice out of an estate more than the family.
In our opinion, the only good estate tax is one that's been repealed.
Many of our readers well know the old adage, "I'm from the government, and I'm here to help you." That's when most people get nervous. Whether it involves the federal, state or local politicians, many times the government-sponsored solution can be as bad as the government-caused problem.
Or worse.
One example: In 2007 the Oregon Legislature came up with a formula to exempt some natural resource-based estates valued at up to $7.5 million from the state estate tax. Fair enough, but the vague language left many folks scratching their heads.
The following year, the Legislature cleaned up the language - and added a requirement that at least half of the estate be resource-based. As a special twist, legislators made the 2008 change retroactive to May 1, 2007.
The result was 14 families received estate-tax bills totaling $480,000. In some cases, the bills were received after the estates had been probated.
Legislators are now considering another fix for this law. Our only hope is that this one won't be even worse.
As they do that, we humbly offer a suggestion. Instead of endlessly monkeying around with the estate tax to try to make it sensible, why not simply repeal it altogether? And while they're at it, legislators should give those 14 families their money back.
The unfairness of estate taxes is unequivocal. When someone dies, the government lays claim to a portion of his or her property. Depending on the size of the estate, the tax bill can be in the tens of thousands of dollars or even higher.
This hearse-chasing form of taxation has forced many a family to sell off the farm or borrow huge sums of money to make the tax collector happy.
In the case of Oregon's mixed-up mess, one family received a $42,000 estate tax bill. Another received a bill of "upwards of $40,000," and another got off light with a bill of "only" $24,055.
For years, small-business and farm organizations such as the American Farm Bureau Federation and its state affiliates have pleaded with the state and federal governments to repeal this despicable tax.
Government operatives like the estate tax because the true "victim" cannot defend himself - he's dead. That leaves only grieving family members to try to sort through the tax bill as the departments of revenue lick their chops.
Accountants argue that estate taxes address the higher basis value for property and investments that is caused when they pass from one generation to the next.
That, of course, is an argument only an accountant can love. In actuality, the state and federal governments will continue to enjoy the ability to tax that property. They'll get their money; they just won't get it in a lump sum like they do through the estate tax.
Government operatives will tell you that every dollar they can scrape together, including the estate tax, is much-needed in these difficult economic times.
What they can't explain is why they think they deserve a slice out of an estate more than the family.
In our opinion, the only good estate tax is one that's been repealed.
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