Legislators in the state of Oregon have proposed a tax on the distribution of a life insurance policy’s death benefit.
Oregonians who purchase life insurance and annuity products to assure the financial security of themselves and their loved ones would be hit with a tax that undermines their carefully-made financial protection, long-term savings and retirement income. H.B. 2854 would impose a tax on the life insurance benefits received by Oregon families suffering the death of a loved one. It would also impose a new tax on savings through life insurance and annuities.
This strikes me as monumentally stupid. I understand that Oregon (like many other states) is suffering a budget crunch, but this has to be one of the least sensitive decisions that has been (or yet to be) made. Why would you, at a time of deep grieving, want to make the problem worse by telling the family of a deceased individual that the government has to take it’s cut of your forsight to plan for your loved one’s early demise. This is yet another case of government punishing those who act responsibly.