As far as dying goes, Oregon is a terrible place to do it for those who want to pass down a home, business or life’s savings to loved ones tax-free. Those heirs might have to scramble and sell off assets to pay the nation’s only estate tax that kicks in on estates worth as little as $1 million.
In 20 years, it’s not unreasonable to believe that most houses in Portland and the Valley will be worth around $1 million or more. That alone will eat up the $1 million exemption, leaving everything else taxed automatically upon death at 10% to 16%.
Say a person or couple has saved another million for retirement, medical expenses, and so forth. That $2 million estate will be subject to a 10.25% estate tax—$102,500—by Oregon just because the person or people in question had the gall to die in Oregon. By contrast, a resident of Nevada or California or Idaho or any number of states with no estate taxes would be able to pass all their money—which has already been taxed by the government in most cases—to their heirs.
I’ve been in Oregon the vast majority of my life and I’m happy to pay income and property taxes. They are the price of living in the kind of society I want to live in. But estate taxes (and long-term capital gains taxes) make me nuts. Oregon’s estate tax is the single biggest reasons we may leave the state in our final years.