Under current law, farmers who leave $4 million per-couple in nominal farm assets to their heirs do not have to pay any estate taxes. Because of provisions that let them value their farms at less than full market value, some farmers can leave farms whose full value is almost $6 million to their heirs without paying estate taxes. Despite the rhetoric of estate tax opponents, there is no evidence that any farmers nationwide have to sell their land to pay estate taxes.
Yet, estate tax opponents in the House and Senate have proposed an unlimited estate tax exemption for farmers. In other words, farms would be treated differently from all other assets, and farmers could leave to their heirs even the largest landed estates without paying estate taxes.
If farmers are already well protected under current law, what motivates the estate tax opponents behind this proposal?
The answer is: it's not about the farmers. This proposal offers a loophole for billionaires in other lines of work to leave great wealth to their heirs, without paying estate taxes, by buying up farmland. The foreseeable consequence will be higher farm land prices and, paradoxically, greater challenges for young farmers who want to take up their parents' and grandparents' honorable work on the land.
Read the report from the Center on Budget and Policy Priorities for the full story.