The Death Tax and the Death of Family Farms

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Relief from high inheritance taxes expires at the end of December, 2012. In the article “A Storm of Estate Taxes Threatens Farm Country,” Lynne Finnerty says that the new estate tax exemption will drop to one million dollars and the tax rate will increase to fifty-five percent (Finnerty). Lowering the estate tax exemption while increasing the rate may consequently cause the liquidation of many multigenerational family farms and an ultimate decrease in the world’s food supply.

Comprehending the effect of estate taxes on farm families requires a general understanding of farm economics. In Illinois, for example, there are 76,000 farms and more than 28 million acres of farm land. Therefore, the average farm size is 368 acres, including hobby farms (“Facts About Illinois Agriculture”). Illinois is a major corn producing state and the cost of corn production in 2012 is $832 per acre. The revenue from a 170 bushel per acre corn yield at $5.50 per bushel is $880 (Caldwell). Thus, an average corn farmer in the state of Illinois can expect to net approximately forty-eight dollars per acre on his corn crop in 2012. The average farm ground value in Illinois in 2011 increased to $5800 per acre (Tartar). These numbers are important to note when analyzing journalistic and political viewpoints concerning the effects of estate taxes on family farms.

The expiration of the tax relief act will negatively affect the next generation of American farmers. Farming does not generate enough income to meet the estate taxes that will be owed on a piece of farm ground. According to Editor Stu Ellis, in “End Estate Tax, Cut Deficit,” “Despite the high value of farm property, estates have relatively low liquid assets necessary to pay the high estate...

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