Healthy Heifer
DNA Profiling
Suppl./Nutrition
Pasture & Rangeland
My Beef Checkoff
Commentary: A bi-partisan what?
- Youth “Telling the Beef Story” video blog winners announced
- U.S. to seek G8 support for oil reserve release
- Argentine province set to hike taxes, farmers strike
- Wheat posts biggest gain in 6 weeks on Wednesday
- Implanting nursing beef calves mid-summer returns over $435/hour
- AFBF: Multi-legged stool best approach for Farm Bill
- My Beef Checkoff: May dairy edition
- CME to pare back plan for expanded grain trading
- Forage focus: M&M determines hay quality
- Cushing crude oil inventories at record levels
- Group claims breakthrough with discovery of new steak cut
- Jolley: Five Minutes with Jim Avila’s “slimey” tweets
- They’re not all food Luddites
- Standoff in cash cattle as beef prices slip, feeders higher
- Temple Grandin enters New York Times' essay contest
- Learning more about what consumers are saying
- Update: A meat eater wins The NY Times contest
- Sustainability: new term, traditional values
- Kindergarten for calves
- Dicey odds for continued drought
- Commentary: Searching for beef’s next toe-stubber
- Commentary: Why The New York Times' essay contest is phony
- Commentary: Vegan sweet dreams
- BSE found in central California, USDA confirms
- Food industry battling back from 'pink slime' hysteria
- Slime time at AMI: expo panel on rehabbing LFTB
- Science must guide ag policy
- Vigilante cattlemen arrested for beating alleged rustler
- Veterinarian responds to New York Times essay
- Commentary: Advise and dissent
These days it seems like a point of agreement between Republicans and Democrats in Congress is about as common as a five-legged jackalope. Fortunately though, on some issues affecting farmers and ranchers, at least some of our esteemed congresspersons from both sides of the aisle manage to see eye-to-eye.
This week’s example is an issue near, if not dear, to the hearts of agricultural producers – the estate tax. Thursday afternoon, U.S. Representatives Kevin Brady (R-Texas), Mike Ross (D-Ark.) and Devin Nunes (R-Calif.) joined in a telephone news conference on the filing of the bi-partisan Death Tax Repeal Act – H.R. 1259 – with Reps. Kristi Noem (R-S.D.) and Dan Boren (D-Okla.), that would permanently repeal the estate tax, commonly known as the death tax.
We’ve written numerous articles on this issue, outlining how the death tax can place such a heavy burden on family farms and ranches, where most of the business’ assets are tied up in land and equipment. For some of the Nation’s wealthy, whose assets consist primarily of cash, equities or other liquid investments, paying the tax might mean Junior has to drive a Mercedes instead of a Bentley. But for farm and ranch families it can mean the end of the business. With little cash relative to the farm’s value, heirs sometimes need to sell part or all of the operation just to pay the tax, taking land, and the next generation, out of agricultural production.
This tax, says Representative Brady, is the number-one reason family farms and other small businesses are not passed down to the next generation, and small businesses, he adds, account for 68 percent of new-job growth in the United States.
Representative Ross says that in his district, containing 21,000 square miles in Arkansas, crops and cattle are a way of life. Small businesses account for half and agriculture about one sixth of all jobs in Arkansas.
Currently, the tax affects estates worth $5 million or more, after the last-minute 2010 extension of Bush-era tax cuts. Without that extension, the exemption would have been reduced to $1 million with a maximum tax rate of 55 percent. The extension is good for two years, but beyond that, it’s anyone’s guess which direction estate taxes will go.
Ross points out that in his state, a row-crop farmer with 2,000 acres of land easily has assets worth more than $5 million in land alone, and he says concern over estate taxes is a common sentiment among Arkansas farmers and ranchers.
Brady believes the bill stands a good chance of passage in the House of Representatives, but “is going to be a fight” in the Senate. He expresses some concern that the issue might lack a sense of urgency in the Capital due to the tax-cut extension, but believes now is the time to eliminate the tax altogether.
So, it’s good to see at least some bi-partisan cooperation on this issue, and this just might be the time to settle it once and for all. NCBA strongly supports this legislation, and other ag groups likely will express their support soon. If you believe the death tax could damage your business, or your neighbors’ businesses, contact your Congressional representatives and ask them to support H.R. 1259.
Comments (9)
Leave a commentRobert Achenbach
Report AbusePlease publish the names of the families who failed to pass their farms to their heirs for the SOLE reason that there was a FEDERAL estate tax - not state inheritance tax - but federal estate tax. If you find one, you are also going to find attorney malpractice. There are only a few farm businesses even in danger of paying any estate tax and they are super-wealthy vineyards in CA. The only reason farmers worry about the estate tax is because of all the rhetoric and scare tactics used by the wealthy to get us regular folks to believe it might affect us. There is a word for that and I step in some every day.
Walter Hylton
Report AbuseI agree with Robert Achenbach. The fear of the estate (death!) tax is just another example of overblown fear mongering. For a couple, they will each get the $5 million exemption if they have any decent tax advisor. A very, very small number of farms will ever be seriously affected by the latest estate tax legislation. It is actually a non-issue that is used to rile up the base.
Chris
Report AbuseDo the math...
What is the average price/acre for high quality farm ground in the midwest? Answer - $5-8k/acre
$10,000,000/$8000 acre = 1250 acres. Um pretty decent farm but I bet I could find a few.
What is the price/acre of ground around growing rocky mountain towns like the respectable Bozeman, Montana? Oh anywhere from $8k to $1,000,000/acre.
Sure these farms and ranches won't be hit by the death tax, they'll just section them all up and sell them off slowly and we will have more and more ranchettes. I do agree with one thing the previous commentators stated, and that is if you plan right, transferring wealth is "easier" now that the bar has been raised.
I think this is no easy question, some are hurt, some are not, it just depends on were you are lucky or un-lucky to live. A rancher with 10,000 acres in Worland, Wyoming may not hit the ceiling but a 250 acre "small" farmer in Bozeman, Montana will. Is this fair? NO!!!
Julia Milton
Report AbuseThis is a horribly unfair tax. Farmers pay more in taxes all of their lives than anyone else. At their death their heirs are hit with more tax than they can possibly pay. The costs of probating such an estate are enormous!!! Lawyers get rich off of this expensive and complicated process! Appraisors must be hired to value the property NOT at the assessed valed, but at the fair market value!!!! My father was 91 when he died in 2006. The exclusion was 2 million, then. He had $26,000 in the bank at his death. The inheritance tax was estimated to be in excess of $5,000,000!!!! Even after conservation easements and alternate use valuation to reduce the land values the family owed $3 million in taxes! The legal fees are in excess of $250,000. Now...tell me how "fair" this tax is again....In the meantime as we sell things to create funds to pay the inheritance tax we must pay capital gains tax!
Julia Milton
Report AbuseMr. Achenbach,
you haven't lived through the nightmare of having to basically "buy back" land from the government you thought was already yours. Land that your father worked his whole life to acquire. By the way you don't "buy it back" at the price he paid for it. You have to hire an appraiser and a lawyer to tell you what TODAY'S market value is. They are the ones making money in this system. The government doesn't even make what they do because it costs the government so much to oversee and aminister the estate tax department.
Mark Anderson
Report AbuseI agree with Thomas Jefferson, who championed an early version of the estate tax in Virginia. America needs meritocracy not aristocracy.
Marvin Kimmet
Report AbuseWe are 4th genteration ag producers. As the land values increase and we try to add more land to pass on to our children that have a love of the land and the rural lifestyle, it seem to me the harder you work, the more your worth and if you reach the asigned "value" the goverment is NOT entitled to capitalize on our hard work, my family IS.
Julia Milton
Report Abusei have tried and TRIED to leave a comment!!!!
It just won't let me do it! But I have LOTS to say on this subject!!!!!
Maxine Jones
Report AbuseSure is proof here that liberals have been successful generating wealth envy in order to keep the estate tax rolling in.........to keep more people from rising to the level of those who don't have to pay it. How much have any of the super wealthy like the Kennedy's paid in estate taxes, anyway?
And, the mean spirited resentment of those who have something to leave their 'heirs' as well as of those who 'inherit'.......is disgusting.
Worse, is the fact that it takes something like 65% of the income from estate tax to collect it! Talk about outrages!!!!
Those who claim no one is harmed by estate taxes seem to be typical of those small minded people who resent anyone they PERCEIVE has more than themselves, or has too much.
Another erroneous perception is that those who "inherit" a farm/ranch have done nothing to earn it. In our experience as third generation on a 5 generation family ranch, each succeeding generation has worked extremely hard to help the previous generation BUILD that ranch. Further, ranching is such a cash poor, asset 'rich' business, very susceptible to inflation of land values that some will be extremely surprised to hear what Uncle Sam believes their 'subsistence' ranch is truly worth when the elder generation dies.