Where Capital Gains and Estate Tax Reform Stand
Today...
The current federal tax
system limits economic opportunities for working Americans by
discouraging investment, saving and entrepreneurship. The
burden is especially heavy on farmers and other small business
owners who often operate under slim profit margins and have
little capital left over to help their businesses grow.
Capital gains and estate taxes act as roadblocks to growth and
jeopardize the profit-making ability of family farms.
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Farming
and ranching are capital intensive businesses. The
capital gains tax hits those persons whose largest
capital gain is often the result of the sale of their
house, farm or family business. It penalizes investment
in property and equipment and hinders job
creation. |
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Farmers
and ranchers pay huge capital gains tax bills on
inflationary rather than real increases in the value of
their investments. |
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Ninety-nine
percent of U.S. farms are owned by individuals, family
partnerships or family corporations. Estate tax laws
often force the sale of family farms rather than
allowing future generations to continue farming.
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Estate
planning tools are costly and sap resources that could
be used by farmers and ranchers to expand their
operations. | |
...And Farm Bureau's Solutions for the
106th Congress
The federal tax system
should encourage economic growth through incentives to work,
save and invest. Repealing or reducing capital gains and
estate taxes could help farming and ranching operations expand
and stay in the hands of family members who helped build them.
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A cut in
the capital gains tax rate would help small farmers and
business owners raise venture capital and would enhance
long-term economic growth. |
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Eliminating
the capital gains tax would add billions of dollars to
the economy and create millions of new jobs.
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The
estate tax should be eliminated or the exemption should
be increased and indexed for inflation. For estate tax
purposes, land should be assessed at its agricultural
value rather than its market value. |
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Estate
taxes should be deferred until a farm is sold outside
the family. Farm property that is restricted by a
voluntary conservation easement should also be exempt
from estate taxes. | |
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