OR Would Lose $77 Mil/Year in Charitable Gifts if Fed. Estate Tax Repealed

For Immediate Release: October 15, 2003
Contact: Bob Keener, (617) 423-2148 x119

Oregon Would Lose $77 Million Per Year in Charitable Gifts if Federal Estate Tax is Repealed, New Study Shows

“At this time of high unemployment, Oregon’s charities are more crucial than ever. This is no time to devastate those charities by repealing the federal estate tax.”

– Howard Shapiro, vice chairman, Albina Community Bank

Download studies:

The Estate Tax and Charitable Giving: State-by-State Analysis, OMB Watch (PDF, 216 KB)

Trillion $ Trade-Off: The Impact of Federal Estate Tax Repeal in Oregon, National Priorities Project (PDF, 48 KB)

Source Notes and Methodology (PDF, 28 KB)

PORTLAND, OR, October 15, 2003 – Just as Oregon is reeling from extraordinarily high unemployment, President Bush is proposing a new tax break for multi-millionaires that would adversely affect Oregon’s quality of life. Estate tax repeal would reduce gifts to charities in the state by $77 million per year, according to a new study by the independent research organization OMB Watch.

The study shows that Bush’s plan to permanently repeal the federal estate tax would remove a strong incentive for wealthy households to donate to charities. The magnitude of the charitable loss from repeal of the estate tax would equal the total annual giving in Oregon of the six largest foundations that donate in the state.

OMB Watch economist John Irons concludes that, “Repeal of the estate tax would result in a significant reduction of charitable giving to Oregon charities, at a time when we are increasingly turning to charities to provide services that make up for public budget cuts. It would mean loss of jobs, services, and perhaps even whole institutions.”

According to the Congressional Budget Office, repeal of the federal estate tax would cause a loss of almost one trillion dollars from the federal Treasury over the next 20 years. A new analysis by the non-partisan research organization National Priorities Project illustrates how Oregonians would benefit if a share of that trillion dollars was spent here.

“Our study shows that Oregon’s share of the one trillion dollars, based on population, would be $444 million annually – almost half the recent state budget deficit,” said Anita Dancs, Research Director for the National Priorities Project. “Translated into local spending, this amount of funding could pay for 2,081 public school teachers, 2,553 firefighters, 22,778 scholarships for university students, and health coverage for 24,924 people, every year for 20 years,” she said.

Background on the Federal Estate Tax:

Under tax legislation passed in May of 2001, the amount of wealth exempted by the estate tax gradually rises until 2009 to $3.5 million for individuals and $7.0 million for couples.

In 2010, the estate tax is repealed for one year, at which time the law “sunsets” and reverts to its pre-2001 status. Proponents of repeal in Congress are pressing for “permanent repeal” while others advocate reforming the tax by raising wealth exemptions, but retaining a tax on large fortunes over $2-4 million.

Permanent repeal would mean a loss of $982 billion in federal revenue over the next 20 years.

Despite the largest federal deficit in history, President Bush includes permanent repeal of the federal estate tax in his six-point economic plan. Senate Majority Leader Bill Frist has declared that repeal of the tax is a top priority in the U.S. Senate, and the U.S. House voted this past June to permanently repeal the estate tax.

“We can’t afford estate tax repeal,” said State Representative Brad Avakian (D - Washington County). “It would be the height of fiscal irresponsibility to slash federal revenue at a time of mounting deficits and mounting costs. Oregon’s U.S. Senators should heed the resoundingly clear message that the state legislators sent when they voted to retain our own estate tax: no more expensive tax breaks for millionaires.”

Both of Oregon’s U.S. Senators, Republican Gordon Smith and Democrat Ron Wyden, have consistently voted in favor of repeal and against reform of the federal estate tax when proposals have come to a vote during the past three years.

Under current law, only an average of 65 estates in Oregon will be wealthy enough to pay the tax after exemptions are raised to their highest level in 2009.

“The children of the families we serve need a legacy too, the legacy of equal opportunity left to them by all the previous generations. If our children can get health care, day care, and quality education by reducing the inheritance of a few wealthy heirs, that seems like a good trade-off,” said Jay Bloom, president/CEO of Morrison Child and Family Services in Portland.

United for a Fair Economy (UFE) is a national nonpartisan non-profit organization, which raises awareness that concentrated wealth and power undermine the economy, corrupt democracy, deepen the racial divide, and tear communities apart. UFE’s Responsible Wealth project organized over 1,500 wealthy people to sign the Call to Preserve the Estate Tax, which helped delay estate tax repeal until 2010. See www.faireconomy.org for more information.

National Priorities Project (NPP) is a non-profit community education and research organization that for 20 years has dedicated itself to making the nation's budget priorities something that ordinary citizens can understand and help shape. NPP offers citizens and community groups tools and resources to shape federal budget and policy priorities that promote social and economic justice. See www.nationalpriorities.org for more information.

OMB Watch is a 501(c)(3) nonprofit organization located in Washington, DC, and was founded to promote government accountability and citizen participation. OMB Watch was formed in 1983 to lift the secrecy shrouding the White House Office of Management and Budget (OMB), and now more widely tracks the federal government's institutional responsiveness to public needs. See www.ombwatch.org for more information.