As we approach the end of the year lots of political dander is floating through the air on a variety of topics. Included is the estate tax.
The Federal Estate Tax is designed to tax a certain amount of the estate left behind by someone who has recently passed. Currently people are able to gift/exempt a value of $5.12 million of their estate to an individual or ($10.24 million per couple). Any remaining estate value above those figures is then taxed at 35 percent.
The estate tax is set to take a tax hike in 2013 to 55 percent and only a $1 million/individual exemption unless legislators act soon.
Why does this matter to farmers? Because numerous farm and ranch operations are well over that $1 million or even $5 million estate value mark.
You have to be aware that agriculture operators are often asset rich (land, cattle, equipment) and cash poor. They operate on a revolving line of credit so having to come up with tax money (cash) is not the easiest thing.
In the cases that I have heard about, multi-generation farms have had to sell off large parcels of land or cattle to pay for the tax burden. What happens then is a significant step backwards in their production. Less production means less revenue, and sadly often times it leads to them exiting the business.
What does this then mean to the mainstream American public? A depletion in their rural America with the loss of farmers and ranchers that grow the food they eat. Food prices will rise, more food will be imported and food safety and quality will likely suffer.
Have problems with us as a nation that depends on foreign oil? Wait until we depend on other nations for food.
– Codi Vallery-Mills