WASHINGTON (Gray DC) - A Republican effort in Washington is pushing to repeal the Estate Tax, a tax on estates passed on to family. Opponents of the tax say they want all of the money they earn to go to their heirs. Others say it’s just a tax cut for the rich. Pat Wolff, from the American Farm Bureau Federation says this tax cripples farmers across the nation.
Pat Wolff says the estate tax is like a dark cloud over farmers.
“The estate tax is like a dark cloud hanging over the heads of farmers,” said Wolff.
Wolff says the estate tax has sent farm families through tough times. It is a 40 percent tax on individuals with estates worth around $5.49 million, and couples with estates around $11 million.
“If they’re over the exemption level, they have to figure out how they’re going to come up with cash when a family member dies. If they’re under the exemption level, they have to worry about estate planning costs, about life insurance, accountants and attorney fees,” said Wolff.
She says farmers have to buy expensive equipment to succeed, and they don’t necessarily have cash flow to pay off this tax. Rep. Ron Estes (R-KS) wants to make sure these family farms are sustained through multiple generations by eliminating over taxation.
“They’ve already been taxed as they earn the income. So it’s kind of a matter of fairness of, should you come back and tax them a second time just because somebody died?” said Estes.
Repealing the estate tax is largely a Republican effort in Washington, but opponents of repeal say it is merely an effort to provide tax cuts for the rich.
“The estate tax only hits the wealthiest 0.2 percent of estates,” said Hunter Blair from the Economic Policy Institute.
Blair says the money from this tax can be used to improve infrastructure, education and other programs. He says this repeal, like the rest of the Republican tax plan, has one explanation: “They are not interested in helping low and moderate income individuals,” said Blair.
There is no clear-cut timeline for passing a tax reform package, though many on the Republican side say they hope to do so this year.