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Entries in death tax (1)

Tuesday
Oct162012

Tax Measures and Tax Reform

When Oregon voters receive their ballots this weekend, they will confront three very different tax measures, which could have an impact on the prospects of comprehensive tax reform in the state.

The ballot measures deal with prohibiting more real estate transfer fees, phasing out the estate tax and modifying the corporate income tax kicker. Proponents of comprehensive tax reform in Oregon worry the measures could remove issues from discussion that could sweeten a broader tax measure.

So far, none of the tax ballot measures has stirred much public debate, overshadowed by the higher profile and more costly fight over two measures to allow privately owned casinos in Oregon.

The three tax measures have received spotty editorial support. Measure 79, which would place a ban on future real estate transfer fees in the Oregon Constitution, has been called overkill since there already is a statutory ban in effect. Measure 84, which phases out the estate tax, has been questioned because there already is a $1 million estate exemption. Measure 85, which redirects corporate income tax kicker rebates to K-12 schools, has been criticized because it won't automatically mean more money for education.

Local government officials seem resigned that the constitutional ban on real estate transfer fees will pass, with financial backing by the National Association of Realtors. Washington County is the only Oregon municipality with a real estate transfer fee in place. While there weren't any nascent plans to challenge the statutory ban on such fees, some local officials have suggested the tool would be appropriate for capital projects such as restoring and modernizing county courthouses.

Backers of the estate tax repeal have branded their effort as ridding the state of a "death tax" that cripples family-owned small businesses. However, the Legislative Revenue Office estimates the repeal, when fully phased in, would result in an annual tax savings of $120 million, suggesting it would have a fairly limited impact.

Opponents of Measure 84 also have identified a potential flaw, which they say could create an unintended capital gains loophole.

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