Democrats - destroying the family farm - one death at a time.
The Democrats view themselves as the friend of the farmer. But, nothing could be further from the truth.
Democrats have long insisted that the estate tax is a system that should remain.
In 2008, any assets, in an estate, over $2 million are taxed at 45%.
For 2009, that hurdle moves to $3.5 million.
In 2010, the tax goes away completely.
But in 2011, the hurdle moves back down to $1 million!
There's no logic to the system, but it's the only deal Republicans could make with Democrats to get any changes to the system. Prior to this, all estates over $1 million were taxed at 45%
This isn't a problem for the very wealthiest. After all, they can spend enough money to create trusts and wills that effectively avoids these problems.
But the family farmer, that's another matter, altogether.
Imagine yourself as a Midwestern farmer that owns 500 acres of land. And imagine you want to pass the farm to your child to continue farming.
500 acres is not necessarily a large farm, by todays' standards. But imagine the challenges you face to try to keep the farm intact.
In 2004, that 500 acres might have sold for $2,000 per acre. Giving the farmer a $1 million dollar asset.
However, grain prices have risen to such a degree that the same farm is now worth approximately $5,000/acre.
So, here's the farmers estate tax bill, depending on when he dies:
Year Tax Bill
2008 $225,000
2009 $0
2010 $0
2011 $675,000
Most farmers don't have a spare $675,000, or even $225,000, in cash lying around. Hence, depending on when he dies, the family will have to come up with the money through a loan or selling off part of the land (and incurring capital gains tax, as well).
As a result, many family farms are being sold off, and often to wealthy investors or corporations seeking to diversify their portfolio. In fact, Bill Gates, through his investment fund, has now acquired several thousand acres of Illinois farmland in the past few years.
So when Democrats portray themselves as having their hand on the backs of farmers, it's only to shove the family farmer out the door to make way for farmer Bill Gates.
Democrats have long insisted that the estate tax is a system that should remain.
In 2008, any assets, in an estate, over $2 million are taxed at 45%.
For 2009, that hurdle moves to $3.5 million.
In 2010, the tax goes away completely.
But in 2011, the hurdle moves back down to $1 million!
There's no logic to the system, but it's the only deal Republicans could make with Democrats to get any changes to the system. Prior to this, all estates over $1 million were taxed at 45%
This isn't a problem for the very wealthiest. After all, they can spend enough money to create trusts and wills that effectively avoids these problems.
But the family farmer, that's another matter, altogether.
Imagine yourself as a Midwestern farmer that owns 500 acres of land. And imagine you want to pass the farm to your child to continue farming.
500 acres is not necessarily a large farm, by todays' standards. But imagine the challenges you face to try to keep the farm intact.
In 2004, that 500 acres might have sold for $2,000 per acre. Giving the farmer a $1 million dollar asset.
However, grain prices have risen to such a degree that the same farm is now worth approximately $5,000/acre.
So, here's the farmers estate tax bill, depending on when he dies:
Year Tax Bill
2008 $225,000
2009 $0
2010 $0
2011 $675,000
Most farmers don't have a spare $675,000, or even $225,000, in cash lying around. Hence, depending on when he dies, the family will have to come up with the money through a loan or selling off part of the land (and incurring capital gains tax, as well).
As a result, many family farms are being sold off, and often to wealthy investors or corporations seeking to diversify their portfolio. In fact, Bill Gates, through his investment fund, has now acquired several thousand acres of Illinois farmland in the past few years.
So when Democrats portray themselves as having their hand on the backs of farmers, it's only to shove the family farmer out the door to make way for farmer Bill Gates.
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