The estate tax was established to reduce the transmission of wealth from one generation to the next to mitigate economic disparities and generate revenue. With the highest level of economic inequality in history and a massive budget deficit, the estate tax is now more important than ever. Repealing the estate tax has been a perennial debate in Salem. Tax Fairness Oregon has been–and continues to be–a critical player in retaining this important source of $150-million-per-biennium in revenue for Oregon.
Why Should We Keep the Estate Tax?
Retaining the estate tax as a part of both federal and state tax law has been one of our goals since Tax Fairness Oregon began. Why? Because the estate tax is one of the few mechanisms we have to address the growing economic disparity in this country. The estate tax was established in 1916 to “break up the swollen fortunes of the rich.” The purpose of the estate tax is to reduce the transmission of concentrated wealth from one generation to the next.
Now more than ever, this economic disparity gap needs to be narrowed. In 2001, the wealthiest 1% percent of Americans in America owned 32.7% of the wealth—more than the combined wealth of the poorest 90%. Now, thanks to the Bush tax cuts, the gap is even worse. The estate tax was meant to apply to only the very wealthiest Americans—and that’s precisely what it accomplishes. Nationwide, less than 2% of inheritors pay any federal estate tax. In Oregon, the estate tax generates more than $100 million every biennium.
Many of us joined the campaign of Oregon’s Coalition to Preserve the Estate Tax and were involved with the efforts still being led by the Responsible Wealth project of the national group United for a Fair Economy. We learned much about political process through this work, and were an important part of the effort that convinced Senator Ron Wyden and Congresswoman Hooley to give up their stance that the estate tax should be totally repealed.
We continue to go to Washington, D.C. to lobby as well as to meet our congresspersons on their home turf on the estate tax issue. Recently, our effort has been to convince our state congressional delegations that the federal estate tax is “good enough” as it stands today. The current percentage of Oregon estates paying the estate tax is at an all time low—fewer than 1% of all estates pay the federal estate tax. That’s about 300 estates in 30,000 deaths. It is clear that lowering the rate below its current level is unnecessary. As it stands right now, these heirs are very lucky folks already.
That’s why we lobby state legislators to retain the estate tax.