Tuesday, May 12, 2015

Why Farm and Business Owners Hate Estate Tax (Continued)

Republicans call it the death tax and claim the levy forces the sale of family farms and businesses. Liberals demand evidence of such sales. That's hard to find, as this column demonstrates.

Nevertheless, farm and business owners are right to wish the death tax would go away and stay away. We explained why some years ago. Whether the business or farm owner is paying the last generation's tax on the installment plan or paying insurance premiums to fund the present generation's tax, the annual expense can be a significant drag on operations.

Under the current estate tax, most owners should die tax free. Their advisers may tell them to set aside funds anyway. Better safe than sorry.

1 comment:

Jim Gust said...

The statistics cited do nothing to document the real burden of death taxes on farms. Sure, very few farmers die still owning their farms--it's because they sold out before they died! They had to, or leave a terrible tax mess for their kids. It can routinely take 15 years to pay off the federal estate tax if a farm is still owned at death--or 40 years of life insurance premiums to build up the funds in advance to meet the payment required to be allowed to keep a farm in the family.

One fundamental purpose of the estate tax has been to force family farms to sell out to large agribusinesses. On the record, it has worked splendidly. Soon the family farm will be only a memory. And for liberals, for some reason, that's a very good thing.