For the week of July 10, 2000

Death Of An American Dream

By Bob Ellison

Colorado farmer Robert Sakata came home to the farm to run the family business. But death taxes could take the family off of the farm and out of the business. Sakata Farms is a manifestation of the American dream. Robert's father, Bob, came to Colorado shortly after World War II to work as a sharecropper. Today he is the patriarch of a 4000-acre family vegetable farm and packing facility just north of Denver. Sakata farms not only provides a living for the Sakatas, but also for their employees, who are regarded as family and are involved in the decision-making needed to run the farm.

The Sakata farm has prospered and changed over the years, as has the area surrounding it. A Wal-Mart store and a line of convenience stores borders one field while a housing development borders another. The Sakata farm's productivity is not threatened by the development, but its economic survival may be because the surrounding growth has boosted land values. Robert Sakata says the death tax may be so high on this valuable property that he may have to sell half of the farm when the day comes to pay the tax. He says selling off land would affect more than just his life. He says selling half of the farm would mean letting go more than half of his employees. "We have third generation people that are working for us," Sakata says. "I've grown up with them. Our production manager is more like an uncle than an employee."

The American Farm Bureau's Pat Wolff says the Sakatas' predicament is not unique. "Farmers are property rich," Wolff says. "They own land, they own equipment, but they don't have huge reserves of cash. The government won't take your cow; they want cash." Wolff says farmers in this situation are forced to sell the things that make a farm work. "So what farmers are forced to do is sell their business assets to come up with the cash to pay the government."

Congress has taken steps to relieve farmers like Robert Sakata of the death tax burden. In 1997 Congress raised the death tax exemption so that it gradually increases until reaching $1 million in 2006. This year, the House passed a bill to phase out the death tax completely by 2010. The Senate could take up the measure before the end of June. President Clinton, however, is threatening a veto and phase-out opponents are backing him, saying killing the death tax is simply a gift to the very rich. Phasing out the death tax would help rich people as it would people like Robert Sakata, who have much more invested in their farms and businesses than money. "Farming is in my blood," Sakata says. "I really enjoy it. I feel good about what I'm doing, and it gives me the opportunity to be a part of the community and do something positive." Positive as in feeding the rest of us who don't farm.

Bob Ellison is the assistant director of broadcast services for the American Farm Bureau Federation.

This page was last modified Mon Jul 10, 2000 at 01:32 am