October 19th, 2012

Willamette Week Ballot Measure Endorsements

Highlights from the Willamette Week’s ballot measure endorsements:

Measure 79 – Real Estate Transfer Tax

VoteNO

This measure is one of the most cynical and unnecessary initiatives we’ve seen in years. Real estate agents—middlemen—want to amend the constitution to ban a real estate transfer tax that’s already been illegal under state law since 1989. (Washington County had one before that, and it would continue regardless what happens to Measure 79.)

If Oregon someday wants to consider a transfer tax, lawmakers should be able to debate the idea, and local voters can make their own decisions. But in the past two decades, no one has even gotten close to enacting a tax on the sale of property. Why is this coming up now? Realtors want to protect their own interests, spending more than $5 million in a misleading campaign to do so, and a handful of political consultants saw a fat paycheck by ginning up fear. Vote no.”

 

Measure 84 – Repeals Estate Taxes

Vote: NO

Currently, Oregon taxes estates valued at more than $1 million at rates from 10 to 16 percent. This measure would phase out the estate tax over four years—and, even more generously, allow family members to give unlimited assets such as stocks, bonds or businesses to other family members tax-free.

It’s being pushed by Kevin Mannix, a former Salem lawmaker and gubernatorial candidate. Mannix raised $655,000 for this measure, and, by exploiting the tax code to launder it through his company, hid the money’s true source.

The lack of transparency of who’s funding the campaign is only part of the problem. Mannix says he’s trying to help the heirs of family businesses and farms avoid selling everything to pay estate taxes. But there’s already a $7.5 million exemption from estate taxes for farmers and foresters. And although Mannix talks about protecting small businesses, most of the assets in taxable estates are stocks and bonds.

It’s true that 31 states have no estate tax, but the tax-free asset transfer Mannix wants is unprecedented and would cost the state even more than the $120 million annual cost of ending the estate tax.

Mannix proposes the gutting of state tax policy under the ruse of reform, and would do so without a substantive public debate or a way to replace the money lost to schools, prisons and other services the state pays for. No deal.”

 

Measure 85 Repeals the Corporate ‘Kicker’

Vote: YES

The kicker check is one of the most bizarre structures in Oregon tax code. Triggered whenever the state’s revenue surplus is 2 percent more than it predicted, the kicker is divvied between individual taxpayers and corporations. It’s essentially an April 15 version of a Christmas bonus, handed out like packs of Lucky Strikes when Don Draper’s having a boom year.

As tax policy, it’s madness. A coalition of left-leaning tax reformers say the corporate side of that irregular windfall should go to schoolkids. They rightly note that it makes no sense to give refunds to corporations—most of them headquartered elsewhere—in a state where public schools must increase class sizes and shorten school years. They also say that a couple hundred million dollars every now and then will “help Oregon schools get off the financial roller coaster.”

It won’t: The kicker is so capricious, it’s more like building a Tilt-A-Whirl on top of the roller coaster. And the advocates can be rightly scolded for tiptoeing around the sacrosanct stupidity of the personal kicker. But no one is making a serious argument as to why any part of the kicker should survive.

We wish lawmakers would deal with the state’s tax structure in a comprehensive way. But the kicker is such silly policy, it’s exactly the place for half measures.”

 

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