Kudos should go to Congressman Mike Thompson and Senator Diane Feinstein, both of whom have introduced legislation that would exempt family-owned farms, subject to certain conditions, from the application of the estate tax.
The estate tax, also referred to as the “death tax,” is one of many taxes that will be reestablished or increased on Jan. 1, if Congress allows the so-called Bush tax cuts to expire. The estate tax is one of the most cynical and cruel taxes contained in our Byzantine federal tax code. Its application frequently forces surviving family members, who may be actively and productively involved in the family enterprise, to liquidate a portion or all of the inherited assets in order to pay the estate tax.
Thompson”s and Feinstein”s proposed legislation is a step in the right direction. What is troubling to me, however, is why do they believe that only family-owned farms should be exempt from the tax? Why should only that family asset be protected from being looted by the federal government upon the death of a loved one?
What about the family-owned car dealership or the family-owned winery or engineering firm, grocery store, real estate business or drug store? Are not these enterprises just as worthy of an exemption as the family farm?
The estate tax is so destructive. For this year only there is no federal estate tax. Next year, though, it rockets back up to as much as 55 percent of the value of an estate in excess of $1 million. For the heirs of many small business owners, the tax burden will be crippling.
If the farm exemption is passed and signed into law, I will be happy for the family farmer. But it will beg the question as to why other family enterprises should not be the beneficiary of the same congressional largess. If Thompson and Feinstein wanted to show real leadership on this subject, they would call for the elimination of this tax on all family-owned enterprises. In fact, the tax should be eliminated altogether. These assets have produced revenue for all levels of government throughout their lifespan in the form of property taxes, excise taxes, income taxes, sales taxes and the like. Enough is enough!
I would urge everyone to call or write their legislators and urge them to stop picking winners and losers when it comes to imposing the death tax. Better yet, call them and tell them to leave the Bush tax cuts in place. Families and businesses are in a far better position than the federal government to put their hard-earned income to productive use.
Tom Lincoln
Lakeport
