Big Estate Tax Reductions Undermine Family Farms

Family farmers, ranchers and mainstreet business owners need predictability in the estate tax, but we should be wary of proposals that go too far in slashing the tax on big estates.
Nine years ago a reduction in the estate tax was launched, culminating in complete repeal this year. But there was a catch. Congress couldn't afford permanent repeal, so next year the estate tax returns with the first $2 million of an estate exempt for married couples, and a 55 percent tax on the nation's largest estates.

Some are pushing for raising the exemption to $10 million for couples and dropping the tax rate on the largest estates to 35 percent. Others would repeal the tax entirely.

These proposals are overly generous to the wealthiest heirs and put farmers, ranchers and small business people of modest means at a competitive disadvantage. The overwhelming majority of family farms and businesses would be hurt, not helped.

The estate tax helps level the playing field between those whose success is based to a significant degree on being born into the right family and those who must earn more of their success through hard work. Farming and ranching are competitive businesses. The heir of a tax-free $10 million estate has a huge advantage in competing for land over those who stand to receive modest or no inheritance.

A big reduction in the tax on large estates would add fuel to the fire, undermining the idea of a level playing field at the core of America and hurting family-size farms, ranches and businesses.