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Kill the Death Tax

By John-Walt Boatright  —

The 115th Congress will be sworn in January 4th, and the President-Elect will be inaugurated January 20th. First on the agenda is a repeal of certain Obamacare measures and withdrawal from certain trade agreements. They will likely make good on their election promises. It will be a welcome change.

Another initiative being discussed for the coming year includes a major tax overhaul, which should be one of the first legislative priorities of the new Congress. Specifically, Trump talked confidently of his plan to lower corporate tax rates from 35% to 15%, which will incentivize business to expand and innovate.

In our grand system of checks and balances, Article 1 of the Constitution grants Congress the power of the purse, the ability to budget and allocate and tax. The Founders placed this important governmental power, along with others, in Congress because logically, it would be more difficult to corrupt 435 members of Congress than one President. Despite this, the President has been empowered throughout history to set a vision for policy, for he wields the mighty veto pen as his check on Congress.

A RollCall article from December 12th described efforts of the upcoming Republican majorities to eliminate the estate tax once and for all. I could not agree more, and let me tell you why.

First, it is an indirect form of double taxation. The estate was accumulated by working hard and earning income, which was taxed on an annual basis. When the estate is bequeathed after death, and the estate exceeds $5.4 million, the inheritance is taxed at a rate of 40%. This may seem like such an extreme amount of wealth that the tax is negligible, but one must consider who it is likely to affect in this part of the country.

In New York City, it will be hedge fund managers, corporate CEOs, and financial titans whose estates will owe the government. However, in rural, upstate New York, it will be the farmer. The farmer could potentially have millions of dollars in value tied up in land, equipment, and buildings. Technology has improved production agriculture drastically, but it comes with a heavy price tag. The necessary tools to run an efficient farming operation collectively amount to hundreds of thousands. Coupled with a few hundred acres, a home to accommodate a family, and any number of barns and structures, it is not unrealistic to meet the threshold.

Second, for liberal arguments to be so emotionally charged, this tax punches the emotionally distraught in the gut after the loss of a loved one. Oftentimes, the heirs receive a tax bill with no other option but to liquidate the assets in order to comply. That means selling property. A forced sale of what their ancestors worked tirelessly to maintain. Why does the left not see the emotion in this impact? They are blinded by their own desire to control and expand their power in government.

Third, from a moral standpoint, we proclaim policy to reflect our values as Americans. President Obama trumpets this claim more than any other. If our tax policy punishes an individual or family for succeeding in business, why would they pursue continued success? Rising taxes in general are losing their moral legitimacy. Repeal of the estate tax will send a strong signal of a needed reversal.

American Farm Bureau, a unified voice for America’s farms, has long advocated the full elimination of this death tax, and the general public should join their effort. It is estimated to only account for an average of $20 billion annually; Congress can easily cut the waste in their budget to offset it.

This debate is merely an extension of the left’s demonization of the top 1% and the unfounded indictment of their greed and avarice. Unfortunately, the left turns a blind eye to our nation’s family farms in pursuit of their own moral and economic bankruptcy.

Not even in death can one escape taxes. Rural voters turned out this election, and it made a difference. In turn, Congress should not disappoint the constituency that feeds and sustains us.