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Farm Bureau: Death Taxes Punish Farm Families

WASHINGTON, D.C., March 17, 1999--Until death taxes are abolished, the family businesses that produce the nation's abundant and affordable supply of food and fiber remain under threat, according to the American Farm Bureau Federation.

"Farming is an industry dominated by families, and all too often sons and daughters are forced to sell parts of their farms to pay estate taxes," said Michigan Farm Bureau President Jack Laurie.

"When they have to sell too much, the economic viability of the farm is destroyed and the farm dies with the farmer. Not only do remaining family members lose their livelihoods, but rural communities lose their economic base."

Laurie, a dairy and cash crop farmer from Tuscola County, Mich., spoke today at a press conference announcing a study by the Texas-based Innovative Policy Institute which indicates that death taxes provide few benefits in relation to the toll they exact on society.

The study shows that the death tax strikes families at a time when they are most vulnerable--following the death of a loved one--yet generates less than one percent of federal revenues. And compliance costs for death taxes are nearly as high as the revenue they raise.

According to IPI, it is typically farmers and other small business owners--not the extremely wealthy--who pay the larger share of estate taxes. Laurie said that he and other farmers are weighed down the costly burden of estate planning.

"Some people say that death taxes won't impact small businesses if estate planning is used effectively," said Laurie. "But times are tough for agriculture, and farmers are finding it difficult enough to pay for seed, fertilizer, veterinarians, electric bills, equipment repairs and building maintenance without having to worry about tax bills that will come due when they die."

Farm Bureau supports bipartisan legislation (H.R. 8) introduced by Reps. Jennifer Dunn (R-Wash.) and John Tanner (D-Tenn.) that would reduce the death tax rate 5 percent each year until it is eliminated. Death taxes in the highest bracket, 55 percent, would be phased out after 11 years. Similar Farm Bureau-supported legislation (S. 38) has been introduced in the Senate by Sen. Ben Nighthorse Campbell (R-Colo.).

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