Today, the US Senate voted to extend all expiring tax rates for two years. While I'm sure there is some discussion that could be had within our readership on how our country should be taxed, I for one am glad that the so-called "Death Tax" is at least at-bay for another two years.
The estate tax was originally created and is still associated as a tax on the rich. However, this tax disproportionately affects US farmers, ranchers and small businessman due to its framework. The United States Department of Agriculture even cites the death tax as one of the primary reasons that multigenerational farming and ranching operations are broken up when the past owner passes away.
If the Bush-era tax cuts had not been extended for two more years, the tax would have jumped to levels of 55 percent on any estate valued over $1 million. So, for example, if a farmer in Ohio passes away who owns less than 300 acres (not even enough to make a living), at a conservative estimate of $3,500/acre, he would have land assets alone valued over the $1 million dollar threshhold and his family would have to pay 55 percent of that value to the federal government.
As a consumer, I love to buy my meat and food products from family farming and ranching operations (still over 98% of those in the US). However, taxes like these are part of the reason why it is so hard for young people like myself to take over a family operation and the reason why so many are dissolved today. Let's keep our fingers crossed that the House will follow suit with the Senate's vote so these tax exemptions can stay in effect.
Voters: keep in mind that this tax extension will still be up again in two years. So vote for Congressmen who will not only extend this tax exemption, but perhaps get rid of it in future years so that family operations can continue to dominate the landscape of American agriculture.
Thanks for reading,