Americans for Tax Reform President Grover Norquist sent the following letter to Congresswoman Diane Black (R-Tennessee), Member of the Committee on Ways and Means
On behalf of Americans for Tax Reform I would like to offer my support for H.R. 6439, “Keep the Forest and Farm in the Family Act of 2012.” This bill will revise the federal death tax to allow families who own farms and forest land to pay taxes based on their land’s use value rather than its market value, thus allowing many family owned land areas to remain family owned.
One of the many issues with the federal death tax is the fact that it often forces individuals who are land rich, like farmers and forest landowners, to sell their resources to pay the tax. When land is evaluated for death tax purposes, it is evaluated for fair market value, causing the tax burden on the land to far exceed what families have in cash assets. For many families, this means that farms or land they have owned for many years must be sold to pay the death tax.
Under H.R. 6439, the tax burden on these types of land will be evaluated according to the current use value of the land, provided the owners agree to continue working the land for 10 years. This change will not only allow families who would have previously had to sell off their land not only to keep it, but also gives them an incentive to continue to work that land.
Not only will this bill help landowners financially, but it will eliminate the incentive for timber land owners to prematurely cut to pay the death tax. Because of the burden of the current death tax, many timber landowners are forced to harvest timber too early or too much to pay the tax. This bill will allow landowners to manage their forests in a manner that is both profitable and environmentally sound.
The current economic climate is harsh enough without the federal government imposing additional tax burdens on family businesses. While Americans for Tax Reform continues to push for the full repeal of the death tax, this bill takes a step in the right direction, giving families a better chance at keeping their land across generations. We urge members of Congress to support landowners and pass H.R. 6439.
Full Letter PDF