From Oregon Senate Republicans,
Salem, OR — A bill brought before the House Revenue Committee Thursday by Representative Chuck Riley (D-Hillsboro) would add a state tax to the loss and financial hardship of losing a loved one. The proposed Widows and Orphans Tax would tax the life insurance benefits that families rely on in their time of need. “This is abhorrent,” said State Senator Bruce Starr (R-Hillsboro). “Oregonians who have lost their loved ones and are counting on life insurance to pay funeral expenses and get back on their feet can now expect a bill from the state. Is nothing sacred?”
House Bill 2854 adds life insurance payouts and savings within policies and annuities to the list of what qualifies as taxable income in Oregon these benefits would be taxed at Oregon’s highest rate. Value accrual within a policy that is tax-deferred until withdrawal will now be subject to tax collection each year. No state has ever introduced the repeal of these exemptions. More than 2 million Oregonians from every walk of life hold life insurance policies. All would be taxed.
“This is a despicable attempt to squeeze the most weak and vulnerable in our community for benefits they planned and saved for that are designed to ease the suffering of the living,” said Senator Ted Ferrioli (R-John Day). “It is this Legislature’s fiscal mismanagement and overspending that is responsible for our budget deficit, not widows, orphans and working Oregonians.”
To date, the Legislature has increased taxes by more than $111 million and borrowed an additional $175 million. Last budget cycle the state had more than $2 billion extra to spend. The Legislature spent every last penny on unsustainable programs and now faces a $3 to $5 billion deficit.