A report by the Joint Economic Committee, Costs and Consequences of the Federal Estate Tax, concluded that “there are [high] costs “associated with estate tax in terms of the dissolution of family businesses, slower growth of capital stock and a loss of output and income over time.” This finding is particularly troubling because the estate tax can become too burdensome for farm families to continue to sustain their business. The problem arises from the assets that the government taxes. Most of the taxable income that farmers and ranchers own lie within the land that they use for agricultural purposes. Comparatively speaking, the amount of liquid assets that farmers and ranchers own is actually low. This situation means that farmers and ranchers are likely to incur a large estate tax bill but ultimately lack the liquid assets needed to pay off the tax without dissolving parts of the business to pay the estate tax. For these reasons, the American Farm Bureau Federation supports that abolition of the estate tax or, at the least, the extension of the Bush-era tax cuts.
See Estate Tax Report Released, Farm Futures, July 26, 2012.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.
