More on the Estate Tax

More on the Estate Tax. I’m Greg Martin with today’s Line On Agriculture.

Up to this point there have been a lot of family farms that have gone under due to something called the estate tax and a lot of people have been working to repeal that including the American Family Business Institute. Palmer Schoening, Director of Federal Affairs for AFBI says they have been pushing to get support on Capital Hill.

SCHOENING: In the last election season we did what was called the Death Tax Repeal Pledge. It was our first big effort on that front. We had over 500 candidates sign on. 278 of those won their primaries and 131 are now congressmen and senators. In this election season we’re planning to add to those numbers and that really became the bedrock, the foundation for the Brady Bill over on the House side.

So what about the President?

SCHOENING: On the Presidential front, every single one of the Republican candidates with the exception of Huntsman has signed our Death Tax Repeal Pledge. So I think it’s fair to say if President Obama’s defeated whose ever elected will be already signed and willing and motivated to get rid of the thing entirely. We’re unsure what President Obama would do after the next election cycle but I think it’s pretty fair to say that based on his past positions on the issue he wouldn’t be favorable to complete repeal.

The history of the estate tax can be traced all the way back to 1797 when John Adams enacted a stamp tax. Since then it has come and gone in various forms.

SCHOENING: It was first instituted to just pay for wars and then it was repealed afterwards. After World War 2 it just kind of stayed in place and the exemptions and the rates have bounced around. Now the first death tax was a very, very low rate but during the FDR years it got up to over 70% so you can see how something that’s kind of put in as a benign instrument of wealth redistribution can pumped up to be this very, very harmful tax.

And Schoening explains the disastrous effects of the tax.

SCHONENING: People want the death tax gone for 2 basic reasons. First of all they think it is fundamentally unfair. You pay taxes your entire life and because you were frugal, you saved, you invested in the right way, you did all the right things, you are punished again. For farmers in particular you usually don’t have a lot of cash on hand, most of the value is in your land. The government says ok you’re worth this much, you owe us this much, we don’t care how you get it but give it to us.

For more information visit nodeathtax.org. That’s today’s Line On Agriculture. I’m Greg Martin on the Ag Information Network.