September 14th, 2012 | by NIGEL JAQUISS News | Posted In: Politics, Cops and Courts, Business

Advocate For Higher Taxes Benefits From Tax Break

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Jim McDermott, who heads the litigation practice at Portland's Ball Janik law firm has earned a reputation as one of the city's top lawyers. In recent years, McDermott has begun weighing in on public policy, writing op-eds for The Oregonian about tax policy.

In 2009, when the state was debating Measures 66 and 67, which increased personal and corporate income taxes, McDermott wrote a piece titled "I want to pay more taxes." 

Our government also has great needs for more money. We need to look after our troops. We need to fund Medicare and Medicaid. We need to better educate all of our children, not just the rich ones. And we need to stop adding to our deficit. I want to help with all of these needs by paying more taxes. I want to help bring us closer to fulfilling America's promise to everybody. "One nation indivisible" means we all have to be closer to each other economically. We can achieve this goal if I -- and others like me -- pay more taxes.

On Monday, McDermott contributed another piece to The O, this one titled "No on Measure 84: Estate Tax Promotes Family and Societal Values. In that op-ed, he argued that Measure 84, which would end Oregon's practice of taxing estates over $1 million, is bad policy.

The estate tax raises significant revenue for schools and other public infrastructure. At a time when income inequality and wealth concentration are historically high and growing, why are we offering more tax breaks to those of us who don't need them?

That's a good question—and it applies to McDermott. In 2003, McDermott, who is married to former U.S. Attorney for Oregon and current Multnomah County Court Judge Karin Immergut, bought a $1.3 million West Hills home. In 2004, records show, he paid property taxes of $17,400.

But in 2005, McDermott applied for and received a 15-year historic tax break on his home. That cut his property taxes $7,700, or about 44 percent. Over the life of the deferral, he will save more than $100,000.

In 2005, an Oregonian investigation titled "Historic Homes Enrich the Rich," found that 67 Portland homes valued at more than $1 million were getting historic tax breaks. 

McDermott says he's not talking out of both sides of his mouth. He notes that the historic tax break requires him to pay for specified renovation and to maintain the historic character of his home. He also notes that the historic tax break is legal and a longstanding policy aimed at preserving historic homes.

"I don't see any inconsistency," he says. "It's like a charitable gift. If I give money away, I am entitled to a tax deduction."

Critics, including the lawmakers who scaled back the historic tax break in 2009, have noted that the historic tax break primarily benefits wealthy homeowners and rewards them for making improvements they likely would have made anyway.

"The point of my op-ed is we all need to pay more and the government needs to make us do it," McDermott says, adding that his forgoing the historic tax break would be pointless.

"Me alone paying more does not make any difference," he says. 

McDermott, who represents many people who might someday pay Oregon's estate tax (which currently kicks in a the $1 million level), says he's been taking a lot of heat from clients for his most op-ed. They'd like him to think more like U.S. Rep. Paul Ryan (R-Wis.) — who says he's been influenced by Atlas Shrugged, a novel that's become a philosophical touchstone for the anti-government crowd.

After his most recent op-ed, McDermott says, "One of my clients sent me a copy of Ayn Rand's book."

 
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