Estate tax could threaten family farms
The American Farm Bureau Federation says estate taxes are a threat to family farms and current estate tax exemptions are at risk this election.
Estate tax exemptions like the Jobs Act are set to expire after 2025 which would drop the tax exemption amount from over $11.5 million to $5 million and AFBF Chief Economist John Newton said under a Biden administration the exemption amount could drop even further.
He tells Brownfield Biden hasn’t released a comprehensive proposal…
“However, at different points in the campaign he has signaled his position on the key elements of a future plan and has expressed support for returning the estate tax to the levels we saw in 2009,” Newton said. “That is a tax rate of 45 percent and an exemption of $3.5 million per taxpayer.”
Newton said if the tax exemption amount is changed to $3.5 million, farms roughly 480 acres in states like Illinois and Iowa would be subject to estate taxes.
“If you had it $3.5 million, 74 percent of the acreage of the United States would be subject to an estate tax upon death,” he said. “If it were $5 million, we’re looking at 65 percent.”
He said under current tax levels, about half of the acreage in the U.S. is above the tax threshold. Newton says if farmers, like dairy producers, are forced to liquidate their cows as assets, they will be at the mercy of current market values.
Newton said AFBF will continue to work with whoever wins on November 3rd.