September 8, 2016
Hello everybody out there in farm country. This radio commentary is brought to you by John Deere and the National Corn Growers Association. They are all friends, supporters, and allies of a healthy farm economy and prosperous rural America. Thank you.
And now for today’s commentary—
I haven’t talked about today’s subject for awhile, but that doesn’t mean that I have forgotten about it. I’m talking about the estate tax, or death tax as it is commonly referred to. One hundred years ago (1916), the federal government passed the estate tax. I can’t tell you how many small businesses, farms, and ranches have been forced out of business when the greedy arm of the government reaches in at death and steals almost half the business assets.
I remember when my father, my farm business partner, died. Our farming operation was not huge, but I had to borrow a lot of money to pay the death tax. It took me 10 years to pay off that loan. The death tax is the most unfair, unreasonable, destructive tax we have.
Those individuals with big wealth like Warren Buffett or Bill Gates hire lawyers to shield their estates from the tax. They put the assets into a trust and let their children and family work for the trust. Small businesses are not going to be able to do that.
Some people might assume that the estate tax raises big money for the government. They are wrong. I’m looking at a pie chart telling us where federal revenue comes from. One-half comes from individual taxes, about one-third comes from Social Security tax, about ten percent comes from corporate taxes. Then, look at the estate tax – less than one-half of one percent. It is such a tiny sliver on the big pie chart you can hardly see it. It is nothing to the government, but it is everything to small businesses.
Farmers want to kill the death tax. Hillary Clinton wants to keep it and raise the tax rate from 40 percent to 45 percent.
At least Donald Trump wants to eliminate the tax. Keep in mind that this decision is not up to the President. The Congress has the power to pass legislation to make a change. Voter polls tell us that 60 percent to 70 percent of the people don’t believe the death tax is fair and should be done away with. By the way, Senator Tim Kaine, Hillary Clinton’s Vice Presidential running mate, spoke out a few years ago, saying, “I applaud lawmakers for repealing Virginia’s estate tax. This action protects small businesses and farms.”
Of course, we don’t have to do what other countries do, but most developed countries don’t have a death tax.
The death tax is a burning issue with me and many farm families, but we need major tax reform. The whole Tax Code (thousands of pages) needs to be junked and started over. Now that I got that issue off my chest, get that combine ready to hit the field.
If you would like to review my radio shows going back more than 20 years, just go on-line to www.johnblockreports.com. Have a great weekend. Until next week, I am John Block from Washington, D.C.