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Farm & Garden
Farm News &
Views: Who Says Dirt's Cheap? The topic of the Estate Tax is not what one might expect to see in a Farm & Garden section. It probably seems like something more appropriate for Business & Finance or Politics & Government. But the fact is, without some attention to the economics of farming, particularly here in Vermont, where 'family farm', and not big agri-biz, is the reality, the farm section of Farm & Garden could easily turn into nothing more like nostalgia.
The Estate Tax has been in the news lately. It's been a contentious issue. Many members of the Republican majority in Congress refer to it as "the Death Tax," an obvious reference to the fact that Estate Taxes come due upon the death of the owner of the estate. Some Democrats have opposed the reform as a "tax benefit for the rich," noting that the Estate Tax affects only those estates valued at more than $650,000. But caught between the lines that have been drawn are a significant number of family farms. ... Typically, of course, family farm estates include a significant amount of acreage. And with that acreage, especially when accompanied by the steady increases in land values, especially over the last 25 years or so, comes high assessments. Of course, for State tax purposes, there are rebates available for farms, timberland, homestead exemptions, etc. But the tax burden on family farms has already, and too often, resulted in the farms going under. And even when that hasn't been the case, as you can see all up and down the Valley, many farms have been given over to development, or, in an effort to at least retain the land, golf courses. ... Here in Vermont, Senator Jeffords, in one of his newsletters, has noted his support for some form of modification of the Estate Tax. And back in February of '97, Senator Leahy had already expressed his support for "a targeted estate tax approach that would help family farmers keep their land intact -- and in the family." Congressman Sanders has generally been a vocal opponent of the generalized Republican proposals to repeal or roll back the Estate Tax. In a September 7th press release, Congressman Sanders noted that, "In Vermont, the richest 10 estates would receive half of the annual benefits of this [the Republican] proposal." As for their colleagues in the House and Senate? A quick search for "estate tax" on THOMAS -- a guide to "Legislative Information on the Internet" -- revealed a list of no less than 50 bills from the 106th Congress. [For a full listing of the bills, click here.] Even a quick glance will tell you one thing: The issue is hot ... and hotly contested. Some of the language in these bills is straightforward, as in: "Estate and Gift Tax Phase-Out Act of 1999" [S.76.IS] ... or "Estate and Gift Tax Repeal Act of 1999" [S.75.IS] ... or "Estate Tax Elimination Act of 1999" [S.1128.IS] . Some of the language is at least a little loaded, as in: "Death Tax Elimination Act of 2000" [H.R.8.ENR] ... or "American Dream Tax Fairness Equity Act of 1997" [H.R.159.IH] ... or "Family-Owned Business Survival Act of 1999" [H.R.1278.IH]. As another indication of how this issue is being pushed, you can also find the Estate Tax issue tied to other, unrelated bills. In those cases, we see the Estate Tax showing up in things like both the House & Senate versions of a Medicare prescription drug coverage legislation, as in : "Medicare Prescription Drug Coverage Act of 1999" (Introduced in the Senate) [S.696.IS] ... and "Medicare Prescription Drug Coverage Act of 1999" (Introduced in the House) [H.R.886.IH]. Other amendments to the bills have sought to increase the Estate Tax exemption, as in these attempts: "To amend the Internal Revenue Code of 1986 to increase the estate and gift tax unified credit to an exclusion equivalent of $2,500,000 and to reduce the rate of the estate and gifts taxes." [H.R.4324.IH], or "To amend the Internal Revenue Code of 1986 to reduce estate and gift tax rates to 30 percent and to increase the exclusion equivalent of the unified credit to $10,000,000." [H.R.5058.IH] Some bills have explicitly mentioned farms or "family forest land," but a closer inspection seems to reveal that the specifics of at least some of them have as much to do with subsidizing larger farming or timber operations, or even include other forms of unrelated tax relief. For this year and next, the Estate Tax is applicable to individual estates valued at more than $675,000 {for couples, $1.3 million}. The limit is set to gradually increase until 2005, after which it will be set at $1,000,000. Again, this may seem like big bucks to many of us. But given the increasing valuation of land, and the already-burdensome pressures on family farms, some sort of modification of the Estate Tax seems needed. ******* ******* |
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