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.

So say a cadre of 10 Republicans who are sponsoring a controversial bill to dramatically restructure the estate tax so it exempts an ever-growing pool of Oregonians whom the bill’s backers don’t consider uber wealthy but who are subject to it.

In fact, said Rep. Bobby Levy, R-Echo, some believe the tax has made Oregon “the most frightening place to die.”

Meanwhile, opponents of House Bill 2301, which was granted a public hearing Thursday before the House Committee on Revenue, dispute the need for the bill. Many say it will only exacerbate the exclusivity of inter-generational wealth and leave the state in a budget predicament over lost revenue.

“What problem does this bill solve, when the rich get richer and the poor get less in state services as a consequence?” Portland resident Stephen Wright, a leader of nonprofit Tax Fairness Oregon and an opponent of the bill, told the committee.

Wright was one of more than 100 people who submitted written testimony and about two dozen who spoke. Unlike Wright, the majority were in favor of the bill.

The details, like most tax matters, are complex. Oregonians who die with estates worth $1 million or more are subject to the tax. The $1 million threshold is the lowest of 12 states that levy such a tax, and that’s what’s prompting Republicans’ push to raise the point at which the tax kicks in to $7 million.

The bills’ supporters note that for the past nearly 20 years, the $1 million mark hasn’t budged. That has meant that as home values and inflation balloon, more residents’ estates exceed that amount. And the state has vastly benefited, with revenues more than tripling in the past decade of available data.

Meanwhile, Rhode Island has the next lowest threshold at $1.77 million, then Washington at about $2.2 million, all the way on up to Connecticut at $13.6 million, according to the financial publication, Kiplinger. A federal estate tax applies to estates worth nearly $14 million or more.

Oregon is somewhere in the middle of the pack as far as its tax rates on estates go: 10% to 16%. Among the other 11 states, the rates range from less than 1% up to 20%.

The bill before the Legislature would change Oregon’s rate to a flat 7%.

Rep. Kevin Mannix, R-Salem and one of the chief sponsors of the bill, said he hasn’t been able to find data but knows of people who’ve moved out of Oregon because they wanted to avoid their children having to pay Oregon’s estate tax.

“How many folks in their retirement years are moving out of Oregon to reside somewhere else, such as Nevada, or Idaho or California, none of which have estate taxes?” Mannix told the committee.

Mannix said part of his motivation for filing the bill for all of the state’s residents was a bill that passed into law in 2023 and exempted farms, ranches and other “natural resource” family businesses worth less than $15 million from Oregon’s estate tax, with some restrictions.

Greg Peden, a Yamhill County resident who also works as a lobbyist but said he was speaking for himself, testified that he supports the bill. He said he believes Oregon is more likely to lose residents to states that don’t have estate taxes, and that’s what matters.

“This is a question in my mind, not about who is paying the tax or how rich are they,” Peden said. “This is a question about competition, and we are no longer competitive on the national scheme in our taxes.”

Peden said as it stands now, the estate tax could affect “average Oregonians” like himself. He said he bought a home for $400,000 about 22 years ago. Today, the house is worth about $1.1 million.

“This is a 2,800-square-foot ranch house in Yamhill County,” he said. “Nice place. Nothing super fancy. …When my home was worth $400,000, the $1 million threshold seemed OK, reasonable.” But he said he no longer thinks so.

Some opponents of the bill, however, said they believe supporters are glossing over the severe budget ramifications. So much is unknown. Committee Chair Rep. Nancy Nathanson, D-Eugene, asked the Legislative Revenue Office for more data on multiple fronts, including how much of a financial hit the state would take.

Jon Hart, an economist with the office, said if the bill took effect right away it would cut Oregon’s estate tax collections by about 86%, leaving the state with just $100 million of the $700 million that it’s expected to collect in the next biennium.

Many questions still remain, such as if the bill passed, how many more high-income people would continue to live in Oregon and pay income taxes and how much might that soften the financial blow?

And what evidence is there that Oregon’s estate tax discourages people from living out their lives in Oregon?

“It’s very clear that it has an impact,” said Hart, answering that last question. “I think the question is can you look at data and isolate that impact? And I have not seen a good way to do that.”

Elderly people tend to want to live where their grandchildren are, in warmer climates, in areas of low crime and perhaps maybe even where their favorite sporting team is, Hart said.

“The research has not really found a good way to disentangle those things,” Hart said.

Jody Wiser, who founded advocacy group Tax Fairness Oregon more than 20 years ago, asked the committee to reject the bill. She said when she dies, she wants her estate taxed. She said the heirs of people with more than $1 million estates, like herself, don’t need a leg up.

“Like many children who inherit, my children already have homes, jobs, businesses and portfolios,” Wiser said. “In addition, they left college debt-free. Are they heirs who need a tax break? I think not.”

Others supported the idea of changing Oregon’s estate tax law, but raising the point at which it starts to $2 million or $3 million, not $7 million. They also supported adjusting the number each year based on inflation.

In 2022, the last year for which estate tax payments are available, about 2,200 estates were taxed. That represented about 5% of all deaths.