Minding Ag's Business

Estate Tax Giveback Would Hurt

By  Marcia Zarley Taylor
More than half of farmers surveyed by DTN think resetting estate tax exemptions would have serious consequences on their farm businesses.
More than half of farmers surveyed by DTN think resetting estate tax exemptions would have serious consequences on their farm businesses.


One of the last-minute compromises holding up "fiscal cliff" talks in Congress is where to set federal estate tax exemptions. Republicans are pressing for retaining the current $5.12 million per person exemption (adjusted for inflation) with a 35% tax on the excess; Democrats back President Obama's stance to reduce that to $3.5 million with a 45% rate on amounts above that limit.

A decade ago, the thought that many farm couples would need a federal exemption above $10 million per couple would have been laughable. Since then, average Iowa farmland has soared from an average of $2,100 an acre to $8,300 an acre, minting paper millionaires in the process. As one northern Illinois operator told DTN recently, it barely takes a 400-acre farm in his neighborhood to hit the current limit--and that's a moving target because appraisers say his land is appreciating $1,000/acre/month. 

P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]

No wonder DTN's most recent 360 poll shows that more than half of respondents would be affected by rolling back federal estate tax exemptions now. In fact, 30% think the $3.5 million would seriously affect their farms, another 9% call the impact grave and 16% call that dollar limit devastating.

We'll know what the tax rules will be shortly, just don't die in the meantime.

Follow Marcia Taylor on Twitter@MarciaZTaylor.

(SK/CZ)

© Copyright 2012 DTN/The Progressive Farmer. All rights reserved.

Previous Post (Test Capacity for High Cash Rents)
Next Post (How to Be a Rational Investor)
More than half of farmers surveyed by DTN think resetting estate tax exemptions would have serious consequences on their farm businesses. 
P[] D[728x170] M[320x75] OOP[F] ADUNIT[] T[]

P[L2] D[728x90] M[320x50] OOP[F] ADUNIT[] T[]

Comments

To comment, please Log In or Join our Community .

gregory schimkat
1/11/2013 | 8:03 AM CST
Back in Phoenix about 30 Years ago when everyone was complaining about taxes, an old cowboy used to tell me, "I hope I owe a million dollars tax because that means I made a lot of Money"
T S
1/10/2013 | 8:37 AM CST
Marcia, based on the poll, more respondents fall in the "No Impact" and "Minor" categories than "Grave" and "Devastating". Of the "respondents" how many are farming the land, and how many are simply land owners renting out the land? I think many farmers are renting a large portion of their land, that's why they fall into the lower impact categories. I know of plenty of land in my area that is owned by investors, not farmers. The Estate Tax exemption protects these investors as well as all the absentee land owners out there that inherited land. Farmers will be the only ones to actually farm the land and they will make a profit whether they own the land or rent the land, the question is how to do we change the laws to put farmland ownership back into the hands of the people farming the land and out of the hands of people simply collecting rent checks?
Ric Ohge
1/7/2013 | 9:35 AM CST
Money that builds up Estates comes from Profitable Enterprise, which is already taxed when the profit is made. Growing Legacies, in the long run, creates more tax revenue at the point of profit, and as it can create more jobs, as well as sell more goods and services, the Tax Revenue Base expands in a more sustainable way. "Double-Dipping" now, will cost more in the future. Any one that deals with long term debt or investment knows this. Stop double-dipping. It may preclude gathering a few extra tax dollars now, but builds for a more sustainable future, for business, prosperity AND tax revenue. We talk "Sustainability"-it's time for Washington to walk the walk.
Bonnie Dukowitz
1/2/2013 | 11:55 AM CST
And if sold, only rich untill the Obama grabbers get it into their clutches, which they will, one way or another.
Marcia Taylor
1/2/2013 | 9:00 AM CST
For the record, the bill awaiting President Obama's signature today retains the current $5 million per person federal estate tax exemption plus an inflation adjuster. Legislators split the difference and voted to tax estates at 40% on any excess. Revenue from estate taxes barely dent the federal deficit, but have become a symbol for the "taxing the rich" movement so popular in DC. As farmers like to point out, however, they're only rich if they sell the farm!
Lon Truly
1/1/2013 | 12:05 PM CST
Greater levels of federal taxation have nothing to do with reducing debt or smaller deficits. Larger tax revenues encourages still greater government spending on bigger and more numerous government ratholes as well as still larger deficits.
Bonnie Dukowitz
12/31/2012 | 7:01 PM CST
What is really sad, Marcia, is that government needs to steal so much from the citizens, from wherever they can,, to support their spendaholic habits, in order to justify their own make believe jobs.