FOR IMMEDIATE RELEASE: Tuesday, May 10, 2011

CONTACT: Adam Nicholson, 202-969-2444 ext. 505 or

Adam.nicholson@nodeathtax.org

 Family Business Owners, Farmers and Their Employees Need Inheritance Tax Repeal, Not Estate Tax Replacement

WASHINGTON, DC – The American Family Business Institute (AFBI), a national trade association of family business owners, farmers and entrepreneurs in Oregon and across the country, opposes the vote today to turn the Oregon inheritance tax into a highly progressive estate tax. 

The legislation was passed by the Oregon House of Representatives today and now awaits a vote in the Senate.

“Oregon’s family business owners and farmers have struggled long enough under the state’s inheritance tax,” said AFBI President Dick Patten.  “The legislature is trying to paper over the problem by effectively changing the name, but leaving the transfer tax in place.”

Consider the following stories of real business owners and farmers in Oregon who know just how bad the estate tax is:

·        Neal “Doc” Dow, is a Post rancher whose late wife was forced to sell the majority of her original ranch due to state and Federal estate taxes.  Dow and his wife spent 20 years paying back loans which allowed them to keep a small piece of the original ranch.  Now Doc’s children face the same dilemma.

·        Steve Swanson’s family in Glendale grew the Swanson group from 70 to over 1,000 employees over the course of two generations.  Now the family has to figure out how to keep those jobs and pay a heavy death tax when the company’s current leadership passes on.

·        Peter Nelson’s grandfather started the family business more than seventy years ago.  Today, the family continues to provide oil products and Christmas trees to the community, employing over 30 employees in Salem.  Nelson is worried that the estate tax will force the sale of the business and the jobs it supports.

·        Lowell Miles and his father have used innovative technology to grow their family business, Miles Fiberglass and Composites, and employ more than 100 workers in the Portland area.  Unfortunately, no amount of innovation can protect their business from the estate tax they will owe and the impact it will have on their workers. 

Permanently repealing Oregon’s state inheritance tax will allow family business owners, farmers and ranchers to flourish, boost job creation and grow the state’s tax base.  Study after study bears this out:

·        A 2008 Connecticut Department of Revenue Services study showed that the 26 states without an estate tax produced twice as many new jobs and their economies grew nearly 50 percent more from 2004-2007 than the 24 states with such taxes.

·        High state estate taxes are a major reason why individuals move from one state to another. A 2011 report by the Ocean State Policy Research Institute in Rhode Island, for instance, found that the estate tax is the number one cause of out-migration of Rhode Island residents to states which impose no estate tax.  The report also found that Rhode Island’s estate tax cost the state over $1 billion in lost capital and over $100 million in lost tax revenue.

·        In a study for the American Family Business Foundation, Former Director of the nonpartisan Congressional Budget Office Douglas Holtz-Eakin found that small businesses could create over one million jobs if Congress permanently repealed the Federal Estate Tax.

·        In Oregon alone, the Cascade Policy Institute found that repeal of the Federal Estate Tax would create nearly 21,000 small business jobs. 

 “State estate taxes send a clear message to current and potential business owners: move elsewhere.” Patten noted. “When businesses leave, so do the jobs they create.”

Several states are considering repeal.  Just last week, the Ohio House of Representatives passed estate tax repeal in its 2012-2013 budget.  The Ohio Senate is expected to pass repeal and then the bill will go to the Governor. 

As Patten pointed out, “The Oregon Senate would do well to scrap the current proposal for a state estate tax and instead follow Ohio’s lead and retire their estate tax once and for all.”

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