Two statewide ballot measures on the Nov. 6 ballot take aim at specific taxes. One would amend the state Constitution to outlaw a tax that does not now exist; the other would phase out a tax that affects very few Oregonians and raises more than $100 million a year for the state. Voters should reject both measures.
Ballot Measure 79 would prohibit any local jurisdiction or the state Legislature from enacting a tax on the transfer of real estate. This measure is a solution in search of a problem, and is not necessary.
The Legislature has already enacted a law prohibiting any local government from imposing a real estate transfer tax. The only such tax in Oregon now is in Washington County, which enacted a 0.1 percent tax in 1972. There is no state-level transfer tax.
Supporters of the measure — largely the real estate industry, not surprisingly — argue that the Legislature cannot be trusted not to enact a statewide transfer tax or to repeal the statute banning local taxes. They note that attempts have been made to enact such a tax in previous legislative sessions.
But those efforts never came close even to getting a floor vote, and would have required a three-fifths majority to pass if they had — a near impossibility.
We recommend a no vote.
Ballot Measure 84, the latest offering from anti-tax activist Kevin Mannix, would phase out the state inheritance tax, which measure supporters misleadingly call the "death tax."
The law taxes not death, but wealth inherited by the beneficiaries of a deceased person. Measure supporters say the estate is unfairly taxed twice, because the person who amassed it paid taxes on it when it was earned. But that person is not being taxed again. His or her heirs are being taxed on the income they receive from the estate.
Only estates worth $1 million or more are taxed, and only on the amount above $1 million. The rate starts at 10 percent for the first dollar over $1 million and rises to 16 percent for estates worth $9.5 million or more. Only about 1,000 Oregonians pay this tax every year.
Supporters say the tax must be repealed to save family farms, which often consist of valuable land but little cash, so heirs are forced to sell off parts of the estate to pay the tax. But state law provides a credit of up to $7.5 million for farm and other resource land, making it possible to waive the entire tax.
Eliminating the tax would cost the state about $120 million a year in lost revenue. That's a small fraction of the state budget, but the measure does not provide any replacement.
Finally, a clause buried in this initiative also could allow wealthy Oregonians to avoid paying any capital gains taxes on property transferred from one family member to another. The financial impact of that clause is undetermined, but on average the state collects $400 million in capital gains taxes a year.
The Mail Tribune Editorial Board recommends a no vote on Measure 84.