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The Death Tax and the Death of Family Farms Essay

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Relief from high inheritance taxes expires at the end of December, 2012. In the article “A Storm of Estate Taxes Threatens Farm Country,” Lynne Finnerty says that the new estate tax exemption will drop to one million dollars and the tax rate will increase to fifty-five percent (Finnerty). Lowering the estate tax exemption while increasing the rate may consequently cause the liquidation of many multigenerational family farms and an ultimate decrease in the world’s food supply. Comprehending the effect of estate taxes on farm families requires a general understanding of farm economics. In Illinois, for example, there are 76,000 farms and more than 28 million acres of farm land. Therefore, the average farm size is 368 acres, including …show more content…

In “Kill the Death Tax,” the author states, “The estate tax falls hardest on those who maintain a family business or farm. When the cost exceeds cash assets, the estate tax can force family business owners and farmers to sell in order to pay the tax” (“Kill the Death Tax”). Unfortunately, there are journalists and politicians who attempt to convince the American public that this problem does not exist. Senator Bernie Sanders writes in “Tax Code Must Stop Coddling the Rich,” “Some Republicans argue that eliminating the estate tax would save family farms and small businesses. Not true, though this argument has been tried before” (Sanders). A simple analysis of farm economics proves that Senator Sanders is misleading the American public. In 2012, a 368-acre farm inheritance in Illinois would create an estate tax bill of $623,920. The same farm planted to corn, has the potential to generate an income of $17,664, which is obviously not enough cash to pay the tax. Therefore, the only solution may be to sell part of the farm ground in order to pay the tax, which could hinder the viability of the farming operation. In addition to bankrupting family farms, the mere existence of the death tax is unfair. Assets that are liable to estate taxes involve money that is being taxed for the second and sometimes third times. “It taxes assets which have already been subject to the federal payroll, income and/or capital gains

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