A coalition of Iowa groups and individuals today (Thursday) spoke out against repealing the federal estate tax. Retired Iowa State University ag economist Neil Harl disputes the idea family farms can’t be passed to a descendant because under current law you can inherit up to two-million dollars worth of property — or four-million dollars if you’re a couple — without paying any estate tax.
“I am convinced that it’s a total myth that the federal estate tax jeopardizes farms,” Harl says. “A few years ago I made the statement that I had never seen a farm business that had to be sold to pay federal estate tax. One of the farm organizations put out an all-points-bulletin to try to find at least one in the whole country and they, I understand, did not find one.”
Harl says only the most wealthy estates are subject to the estate tax. Harl says the heirs to the Ted Turners of the world who are buying up large tracts of land in order to create private parks will have to pay a federal estate tax, but not regular Iowans.
Marvin Shirley, a fourth-generation Dallas County farmer who’s a member of the Iowa Farmers Union, says both of his parents died in the past seven years and he didn’t have to pay estate tax on the farm he inherited. Shirley contends it’s a “smoke-screen” to claim that small farmers benefit from the repeal of the federal inheritance tax. “As far as whether my grandson is able to farm or not, inheritance tax is way down the list,” he says.
According to Shirley, health care costs, energy prices and the continued concentration in agriculture are all greater issues that will determine whether his grandson will be able to farm.
Charlie Wishman of the Iowa Citizen Action Network says only three-hundred-57 Iowans paid the estate tax in 2003. “Compared to the other issues that Iowans face — the 44,000 uninsured Iowa children, the 17,942 households that are experiencing hunger, the 4,434 Iowa high school graduates (who) didn’t attend college because of costs — it’s hard to imagine repealing the estate tax as being a top priority for Iowans,” Wishman says.
The U.S. Senate is expected to debate a bill next week that would repeal the estate tax.