Yes on 79 & 84

Written by Baker City Herald Editorial Board October 19, 2012 09:41 am

When the economy is humming along, government coffers tend to be full.

The relationship could fairly be described as symbiotic.

Businesses pay employees to produce goods and services that customers buy. The government takes a piece of the action, in the form of income and other taxes, and uses the money to maintain roads and emergency services and schools that make efficient and profitable commerce possible.

Trouble can arise, though, when the economy stagnates.

When tax revenues decline, government agencies sometimes look for new sources. 

The danger comes when the government, by imposing a new fee or tax, discourages economic activity and thus prolongs the financial doldrums, ultimately hurting both the private and public sectors.

A real estate transfer tax is an example.

And although there is only one such tax in effect in Oregon now — in Washington County — the Legislature and the governor could create a statewide tax and change the law to allow local governments to do the same. A statewide tax has been proposed several times, in fact.

Voters, though, can take away that authority by voting “yes” on Measure 79. We think they should.

There’s no legitimate reason for government at any level to tax the transfer of real estate. Imposing such a tax now, with the housing market barely beginning to recover from the recession, would be particularly ill-timed.

Fortunately, voters can get rid of a similarly onerous and unnecessary tax by voting “yes” on Measure 84. It would initially reduce, then eliminate altogether, the state’s inheritance tax. Currently, estates worth up to $1 million are exempt, but amounts above that are subject to taxes.

Although the tax system includes credits for farms and ranches that can exempt from taxes operations worth as much as $7.5 million, there are plenty of farms and ranches in Oregon, including in Baker County, that exceed that value. Inheritance tax revenues are barely a blip in the state budget — 1.5 percent of the general fund — but the tax can be an insurmountable burden for people who want only to keep a business in the family.