Life insurance has been afforded a special place and special treatment in the tax codes for a long time. Both federal and state entities have long recognized the social importance served by life insurance, which provides families with peace of mind through immediate financial protection.
These death benefits have not and are not taxed as income. When your loved one bought a $500,000 policy to protect you he or she planned on you receiving $500,000 because that’s what the law is and that’s what life insurance does.
Now comes Oregon and house bill 2854 which is being considered at this very moment. The intent of this bill is to make life insurance death benefits state income taxable. As much as I don’t like cash value policies like whole life, the bill would also make cash value buildup in whole life, universal life and annuities taxable as income by the state.
The whole idea unfairly targets those individuals and families who have done the most responsible job of ensuring that their family’s needs are taken care of and their family is not a burden on anyone due to an untimely death. If the current tax status is pummeled by greedy legislators it will take away the incentive for family’s to carry adequate insurance, ultimately throwing a burden back on the state and federal governments.
Whoever dreamed this one up really hasn’t thought through the damage that will be done by their get the state rich quick scheme. They just see income. My guess is that the irresponsible pinhead doesn’t have any family or doesn’t have any life insurance.
Bottom line. This bill will be considered on March 19, just two days from now. If you believe in life insurance and the social good that it accomplishes, take action now. I’ve made it easy by supplying a link that will allow you to oppose it. If you’re not from Oregon, oppose it anyway. We can’t afford to allow success on this anywhere.
Any updates on this? I can’t find news of the outcome anywhere.
Still searching. The Oregon legislative website is less than helpful. It basically shows a list of all bills introduced but doesn’t give the out come on any of them.