Tag Archives: Inheritance tax

Practice what you Preach

It’s hard to do, practicing what you preach.

A couple weeks ago I started attempting to make appointments with United States Representatives & Senators for when I was in Washington D.C. for American AgriWomen‘s (AAW) Annual Fly in.  I admit, I didn’t try very hard to make appointments with those who don’t hold the same political views as me.  However, I did make the effort to stop by their office and say hi.  During these visits we learned that Senator Merkley had coffee with constituents at 9 am every Thursday, which happened to be the next day. Senator Merkley is what one would consider liberal or far left and some may consider me conservative or more right leaning.

When I woke in the morning my idealistic “I am going to change the world” attitude was not quite as “gung-ho” as the day before.  I toiled with the idea of not going. I mean, really they are not going to agree with me so what’s the point, right?  Right. No, wrong!!  How hypocritical of me to be a part of multiple organizations that encourage folks to tell their story and go beyond the choir and I am not expecting the same out of myself? Hmmm…

Needless to say, I showed up.

One of AAW’s key issues was the Federal Estate Tax, at the end of this year the current rate will expire and return to  55% tax and a $1 Million dollar exemption level.   I am one of the chief petitioners for End Oregon’s Death Tax and also feel very passionately about reforming the Federal Death Tax as well, mind you these are two different taxes.   AAW asks for complete elimination or at least an exemption and tax rate that is reasonable. While in DC, I spoke with Senator Wyden‘s aide, Congressman Defazio‘s aide and Congressman Walden about this issue.

I try to not let politicians intimidate me. I have always told myself politicians are just people and should be talked to like people. (Insert jokes here) That’s also what I say when I encourage others to contact their representatives in government.

At Senator Merkley’s office I spoke with the finance advisor, the chief of staff and Senator Merkley himself about the estate tax issue. They all agreed that something needed to be done about it but didn’t agree that elimination was the answer.   According to them, the founding fathers intended for their to be an estate tax.  Oddly enough history shows that any estate tax since the beginning of being a nation has been repealed and the current one has been in flux for the past 90 years. (Side note, the best thing I have learned when someone tries to trip you up with a comment like the founding fathers one, just stick to what you know and continue telling your story.)

All three were very sincere and concerned about my family farm and small business. They wanted to work to find a solution as they agreed current exemption was not enough.  Also they were really glad that I was not “Big Ag”  and was continuing on my family’s legacy because not many had that opportunity.  That was very interesting considering 98% of farms in the United States are family owned & operated.

I did learn from the Senator’s natural resource aide there is that they are trying to get a “goose amendment” in the farm bill.  In the recent years the geese have become a real problem in area for farmers. It’ll be interesting to see what it all entails.  The geese virtually wipe out crops, read about here in my friend Brenda’s blog post.

While the staff was pleasant, courteous and somewhat knowledgeable, I couldn’t help but observe that it appeared that a lot of them weren’t from Oregon.  In fact the natural resource aide was from rural Maryland and received a Master in Forestry from Yale.  I realize the east coast has trees as well but there are very distinct differences.  Just some food for thought.

While I slightly dragged my feet on meeting with the Senator, it was definitely worth it.  I started a conversation with possible further discussion about the death tax and I learned about the goose farm bill amendment.  Is he going to support total elimination of the federal death tax? Probably not.  Will he remember me? Maybe not this time ,but probably by the 3rd or 4th time. :) Will he think of me as a family farmer? Yes. Will I continue to meet with people who do not hold my same views? Absolutely.

“It is not fair to ask of others what you are not willing to do yourself.”  -Eleanor Roosevelt

Telling my story to Senator Merkley

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Filed under Agriculture, AgVocacy, American Agri Women, Uncategorized

Ending Oregon’s Death Tax

Imagine this, you work your whole entire life to leave your children a better life than you began with. You hope on leaving a legacy for multiple generations to come, for them to build upon and bring economic viability to the surrounding community. However, when you die in order for your estate to be inherited by your heirs they must first pay a tax.  A death tax.

As ridiculous as the above scenario sounds it is incredibly realistic. Every time the last member of a given generation passes away the heirs are forced to pay a TAX on the entire estate. In a sense this is a double tax because in the case of real property, like farmland, property taxes have been paid year after year on the land. If you have been making a living off the land then you’ve been subject to pay income taxes on it as well. This misguided tax affects property owners, small business owners, family farmers and anyone who has had a job or one day will hold a job.

For example, I am 5th generation farmer who is just beginning. The 2nd generation of farmer is still alive, my great-grandma, she still owns quite a bit of the land we farm today. When she passes away the land will be passed down to the next generation and when my grandparents die it’ll be passed down again. Each time the land, that is my family’s livelihood and legacy, is passed down the inheritor is forced to pay a tax.

There’s a saying that farmers are land rich and cash poor. The money we have “lying around” to pay this erroneous fee is tied up in other land, equipment and next year’s crop. To generate cash immediately we must either sell land or equipment or get out of the business of farming all together. Potentially one less family farmer to continue on for the next generation because the government taxed them out.

The way it is right now in Oregon any estate over a million dollars is subject to this estate tax. With value of farmland a million dollars is easily reached in land alone. However, when you start adding in the equipment and buildings used on the farm the amount you owe to the state & federal government starts increasing exponentially. Yes, I said state & federal, the state of Oregon has its own death tax separate from the federal death tax.

It doesn’t have to be this way. Right now, in Oregon, there are petitions circulating to put this issue on the November 2012 ballot and end Oregon’s Death Tax. Twenty-nine states have already repealed it and only 3 states west of the Mississippi still have this “double” tax Oregon, Washington & Hawaii.

Here’s what this measure will do if passed:

  • It will phaseout the Oregon estate tax by reducing the existing tax by 25% in 2013, 50% in 2014, and 75% in 2015. As of January 1, 2016, the tax is zero.
  • It phases out the capital gains tax on property sales within a family on the same schedule as the phase out of the death tax.

The revenue generated by the death tax is less than 1.5% of the general fund or roughly $90 million dollars a year. However, the good news is the “lost” revenue will be made up in five years! Professors Eric Fruits and Randall Pozdena issued a report in February of this year in which they predict that elimination of the death tax will lead to the creation of between 31,000 and 44,500 new jobs in Oregon over the next 5 years. This is because of increased in-migration of family owned business and reduced out-migration of such businesses. The tax revenues generated by these new jobs will gradually offset the loss of estate tax revenues.

Jobs & tax revenue? Sounds like a win-win to me.

I urge anyone registered to vote in the state of Oregon to go endoregondeathtax.com and print off an individual petition to sign and mail in. This is issue vital to the economic sustainability of our family owned & run businesses!

In full disclosure, I am one of the chief petitioner’s on the campaign because at 26 years old I am looking at my future as a farmer. I wonder if they’re will be anything left for me and my future generations if my family is continued to be subject to this death penalty.

The Bowers Family! Great-grandma Charity down to my 6 year old cousin Charity! 90 years apart!

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Filed under Agriculture, Economy, family, Livelihood, Oregon, Rural