Measure 84 proposes eliminating Oregon's estate tax and prohibiting all taxes on transfers of property between family members. If passed, it would provide substantial tax benefits primarily to the wealthiest 2% of Oregonians by allowing them to avoid capital gains taxes when transferring or inheriting high-value assets like stocks, homes and businesses. However, it would result in significant lost tax revenue for Oregon that would need to be made up elsewhere. The document recommends voting no on Measure 84 to avoid giving additional unnecessary tax breaks to the richest residents at the expense of funding for schools, roads and other state services.

2. Measure 84:
Two New Tax Breaks for the
Richest 2% Among Us

3. What will this measure do if
passed?
• No estate tax upon death.
• No tax of any kind when ownership is transferred
within the family during life. This means: no gift,
capital gains, income or real estate transfer taxes.
First we’ll talk about the estate tax, then the prohibition
again all taxes.

4. History of the Estate Tax
• First known estate tax in Egypt about 700 B.C.
• Caesar Augustus taxed estates in Rome about 2,000
years ago.
• By the 18th century estate taxes existed in many nations,
including the newly founded United States of America.

5. History of the EstateTax in
the United States
• Our first estate tax was imposed in 1797.
• Temporary estate tax laws were enacted to help pay for
the Civil War and the Spanish American War.
• Modern Estate Tax began with the Revenue Act of 1916
as a tax on the estate instead of a tax levied on the
beneficiaries.
• There have been many revisions in the law since.

6. Teddy Roosevelt on the Estate
Tax
“I feel that in the near future our national legislators should
enact a law providing for a graduated inheritance tax by which a
steadily increasing rate of duty should be put upon all moneys
or other valuables coming by gift, bequest, or devise to any
individual or corporation....
“The prime object should be to put a constantly increasing
burden on the inheritance of those swollen fortunes which it is
certainly of no benefit to this country to perpetuate.”
--Theodore Roosevelt, Message to Congress, Dec. 3, 1906

7. Brief History of the
Oregon Estate Tax
• Has been in effect for 109 years.
• We had an estate tax before we had an income tax.
• Until George W. Bush, federal estate tax was shared with
the states.
• When under Bush the sharing with the states was
eliminated, states had to act to continue having an estate
tax.
• Oregon immediately implemented its own estate tax.

8. Oregon Estate Tax Facts
• Families only pay if their assets are worth more than $2
million ($1 million for singles).
• That is two million dollars after deducting mortgages,
paying all bills including medical bills and the legal and
accounting expenses of the estate and making charitable
donations.
• Only 2% of the population in Oregon actually pay an
estate tax. With 32,000 decedents each year, 730 pay an
estate tax.
• Eliminating the estate tax will only benefit the wealthiest
2% of Oregonians.

9. What assets are found
in estates that
pay an estate tax?
• Farms -- about one-half of one percent.
• Family business assets -- less than 10%.
• Stocks, bonds, homes, real estate, cash, insurance,
retirement accounts, mortgages and art -- 90%.
Source: Congressional Research Service Report: IRS, Statistics of Income, Estate Tax Returns Filed in 2003, October 2004.
Note. this is the year with most filers eligible for a $1 million exemption, thus most similar to OR.

10. What does the Oregon Estate
Tax do for Oregon
• Adds $100 million in revenue per year.
• Helps to fund schools, state troopers, roads, health care,
prisons and all other things state government does for
Oregonians.
• For example, $100 million is enough to pay for 1,200
school teachers for a full year of school.
• If repealed, what will the loss of revenue do to the
necessary services provided by the State of Oregon?
• Who makes the difference?

11. Arguments for repeal
• Family farms and small businesses are forced to liquidate
or sell assets to pay the estate tax.
• It’s double taxation. The owner has already paid taxes on
throughout his or her life. This constitutes double
taxation and is unfair.
• The tax prevents families from building a better life for
future generations.
• Families purchase insurance to pay the tax when that
money could be spent to invest in the business.
• The estate tax eliminates jobs in Oregon.

12. The family farm is not in danger
from the Estate Tax
•Under recent Oregon law changes farm and forest families only pay
if their assets are worth more than $30 million ($15 million for
singles).
•These families can pass on up to $15 million in farm or forest assets
tax-free ($7.5 for singles) if the family continues the business.
•The provision is so generous that families can include farm homes
and up to $2 million in working capital as untaxed assets ($1 m for
singles).
•Extremely few Oregon farm or forest families pay any estate taxes
on their farm or forest assets.

13. • In the past provisions for farms have been far less generous. Still,
there are “1,144 farms in Oregon that have been operating
continuously for over 100 years.” --Oregon Live.Com updated July 30, 2012
• The American Farm Bureau acknowledged to the New York Times
several years ago, … that it could not cite a single example of a farm
having to be sold to pay the estate tax. --CBPP The Estate Tax: Myths and
Realities
• The Congressional Budget Office found that of the few farm and
family business estates that would owe any Federal estate tax, the
overwhelming majority would have sufficient liquid assets (such as
bank accounts, stocks, bonds, and insurance) in the estate to pay the
tax without having to touch the farm or business. And if it is a
problem, they have 14 years to pay.
• Of the 38,000 farms in Oregon, 2/3 are “hobby farms” and do not
meet the definition of a family or commercial farm. --Oregon
Department of Agriculture

14. Farms in Oregon
State of Oregon Agriculture, Oregon Department of Agriculture, 2010

15. The Estate Tax is not double
taxation or unfair
• The appreciation over time of an asset, say real estate, is
known as “unrealized capital gain” until taxed when sold.
• Estates subject to the estate tax include significant
“unrealized capital gains.”
• 56% of larger estates and 36% of all estates are gains that
have never been taxed.
• All inherited assets get a date-of-death valuation.
• The estate tax is the means – the only means -- of taxing
these unrealized capital gains.

16. The Estate Tax does not
prevent a better life
• The tax impacts only those with significant resources who
have the ability to pay.
• A taxable estate includes all assets minus transfers to one’s
spouse, debt, last medical, attorney and accounting
expenses. The $1 million exemption of the first to die can
be saved and used when the second person dies.
• Those subject to the estate tax have the opportunity during
their lifetime to provide their children and grandchildren
with the best schools, equipment, resources and
opportunities to succeed.

17. • Examples:
 A couple’s taxable estate worth $3 million, taxed only
at the second death, pays $101,250 in tax.
This leaves nearly
$2.9 million for the heirs.
 A single person’s estate valued at $3 million pays
Oregon estate tax of $205,000.
Inheritors receive nearly $2.8 million.

18. Planning, including investing in
insurance, is a normal part of
business
•Estate and succession planning is a normal part of business
and places little additional burden on the family or the
business.
•Few would complain that investing in the stock market is a
waste of money. Investing in insurance is just another
investment.
•Insurance is an investment with a guaranteed payment
amount and an unknown rate of return. Most people hope
for long lives and a low rate of return.

19. The estate tax does not
eliminate jobs in Oregon
• If trickle down worked we’d be
swimming in jobs today.

20. Part II
A new tax loophole

21. No tax on transfers
within the family
• Hidden in Measure 84 is a prohibition against any tax on the
transfer of property among family members at any time.
• Nothing prohibits the family member receiving the asset from
immediately selling it at the newly acquired value.
• No family member would pay tax on gains or profits.
• This could be used to transfer stock, homes, commercial
buildings, crops, art or any other assets and never pay taxes on
the gains.
• This creates a huge tax loophole that must not be opened.

22. • CPAs and tax lawyers could be sued for failing to recommend
this tax dodge to high asset clients.
• The state has not estimated the impact this would have on
state revenues.
• We think it will cost more in lost revenue than even the
elimination of the estate tax.
• The richest 2% receive 75% of all capital gains.

23. An example:
• A wealthy NY resident owns $100 million of Oregon
timberland originally purchased for $1 million.
• He sells the land to his son for $100 million and gets an
IOU.
• The son immediately sells the property for $100 million
and pays off the IOU.
• Neither father nor son owes Oregon tax on the $99
million gain.
This will work equally for the Oregon resident .

24. So who benefits from
Measure 84 if it passes?
• The benefits of this measure will flow primarily the
richest 2% of Oregonians when they sell or inherit
stocks, bonds, homes, or other real estate.
• Proponents talk of double taxation.
With Measure 84 they seek no taxation, ever.
• Measure 84 is just two new tax breaks for
the richest among us – and does nothing for
the other 98%.

25. Why we need to
Vote NO on Measure 84
• Estate and capital gains taxes provides substantial benefit
to all Oregonians.
• If we do away with the estate tax the rest of us will have
to make up the $100 million it generates.
• If we create a capital gains tax loophole the rest of us
will have to make up for the unknown millions that will
be lost.
• We do not need to give additional tax breaks to the
richest among us.