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| Reasonable estate tax plan may benefit farmers more than harm |
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Dear Farm World,
I read the letter to the editor by Amanda Woodbury (Estate Tax is death sentence to U.S. family farms, ranches, page 5) and the article regarding Roger McEowen, Iowa State law professor’s thoughts on estate taxes (Law professor: Congress will ignore death tax issue, page 6) in your most recent edition of Farm World. Besides the practical matter that we simply do not have the resources to cut taxes at this point, there are benefits of a “reasonable” estate tax that I urge readers to consider.
It is difficult to agree on a “reasonable” estate tax exclusion, but something like the National Farmer’s Union’s (NFU) proposal of $4 million exemption enables passing on to the next generation sufficient resources for a competent next generation farmer to succeed. (Assets beyond $4 million are also passed on, but taxed.)
There is also value in facilitating the opportunity for talented young farmers with limited resources to compete and succeed in agriculture. This will not happen without estate taxes.
Agriculture is already losing public support partly because of the perception that agriculture is big business and that new young farmers without serious family wealth cannot compete. We need a way for talented young farmers to get started.
(I found it amusing to tell my wife that I was officially a “young farmer” at 57 years of age based on the most recent farmer’s average age statistics. This is also an indicator of how critical it is for U.S. agriculture to encourage new entrepreneurs in this business.)
Farming will become controlled by large business entities – corporate or privately held – if we do not limit the ability to transfer large values of agricultural holdings to next generations tax free.
There are other issues, like Jon Scholl of the American Farmland Trust (not in this edition) raises and like Amanda Woodbury raises that need to be addressed.
There need to be ways so that land that is going to continue in agriculture or ranch use is taxed based on the value for that use, not the value for commercial development.
But these should not prevent the agricultural community from looking at what will happen to the future of U.S. agriculture if we do not provide avenues for new agricultural talent without massive financial resources to develop as future farmers.
An estate tax, with a reasonable exclusion (e.g., the $4 million suggested by NFU) is good for American agriculture. Let’s set aside politics and seek a solution that is achievable and that promotes motivated new farmers and entrepreneurship in agriculture. |
| 7/28/2010 |
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