Opponents of the estate tax often say the tax on large inheritances hurts farmers by adding a levy to property and money that’s passed down through families.
But Chuck Hassebrook of the Center for Rural Affairs (h/t to the Rural Blog) writes that a full repeal of the estate tax would make it harder for small farms to compete with farms run by wealthy heirs.
Some are pushing for raising the exemption to $10 million for couples ($5 million per spouse) and dropping the tax rate on the largest estates to 35 percent. Others would repeal the tax entirely on farmland.
Each of these proposals is overly generous to wealthy heirs and puts farmers, ranchers and small business people who must earn their way at a competitive disadvantage. The overwhelming majority of family farms and businesses would be hurt, not helped.
Farming and business are competitive. The heir of a tax-free $10 million estate has a huge advantage in competing for land and business over those who stand to receive modest or no inheritance. The estate tax helps level the playing field between those whose success is based on being born into the right family and those who must earn success through hard work, brains and determination.