Estate Tax

A recent article in Buckeye Farm News, a publication of Ohio Farm Bureau Federation, prompted me to write this letter.  The article discusses situations whereby heirs who inherit the family farm are required to pay approximately 7% inheritance tax on estates valued at or more than $338,333.

Understandably, heirs in this category consider this an unfair burden - considering attorneys’ fees approximating $8-10,000, plus funeral expenses of close to $10,000, and then at 7%, $23,683. in estate tax.  Ohio Farm Bureau supports Republican proposals to repeal or reform the tax but would expect a veto by Governor, Ted Strickland.  Why would our Governor do this?  Let’s look further.

In the example cited above, after the deductions given, provided the house and land is free and clear, the heir would still be left with $294,650 of “unearned income” which was the basic justification for the tax in the first place.  Ohio Farm Bureau did say, however, they would support raising the threshold of the tax to a higher level exempting many more heirs and aiding those with a much higher debt level and possibly avoid a Strickland veto.

If Mr. Strickland were forced to take a stand on a repeal or reform of the inheritance tax, I’m sure he would cite how much the state relies on this “unearned” income, and should it be taken away or lessened, those with “earned” income would have to make up the difference.

In addition to state, there are federal lobbyists that have been working furiously for quite some time now to get the federal inheritance tax repealed.  They have succeeded in getting it dubbed the “death tax” as a sarcastic public relations complaint that the government even taxes us for dying.  It only affects those who inherit $2.000,000 or more and is taxed at 45%.

As much as the wealthy cry and complain about this tax, our government is well aware of the amount of revenue that would be lost.  And what better support than have two of the country’s and the world’s richest billionaires, Bill Gates and Warren Buffet, speak out against the repeal of this tax.  They have said they believe their heirs will come out OK.  If only there were more who would be so charitable.

As I close this letter, DEMOCRATS LISTEN UP:  On a recent Charley Rose PBS interview, Warren Buffet was asked if he had a favorite for the next President of the United States.  His answer:  Either Hilary Clinton or Barack Obama would be good for the country.  When pressed further he would only say, “Either would be fine.”

Buz Cormany