Ken Newton
Missouri Sen. Roy Blunt has heard the stories about families in his state having to sell long-held farms to pay federal estate taxes. Or those of individuals who worked a decade to pay back money borrowed to satisfy the taxes.
“On the day their mom or dad died, they were working right alongside them on the farm and generated a lot of the wealth themselves through their own hard work,” the lawmaker said.
Mr. Blunt made the comments Tuesday in discussing his efforts to keep estate taxes in check as Congress looks for ways to avoid a “fiscal cliff” at year’s end.
The Republican senator prefers eliminating the estate tax. “It’s unlikely with this president and this Senate,” he said.
But he holds hope that Sen. Max Baucus, a Montana Democrat and chairman of the chamber’s Finance Committee, will prevail in keeping the estate tax at its current level and not seeing a reversion to earlier, more oppressive rates.
Current policy has the estate tax with a 35 percent rate on estate assets exceeding $5 million. (A provision in the law allows an exemption for married couples up to $10 million.) If Congress takes no action, the tax goes to 55 percent on assets over $1 million, effective Jan. 1.
“Sen. Baucus and I talked about this (Monday), and I’m going to continue to work with him and others for full repeal if that’s possible,” Mr. Blunt said in a conference call from Washington. “But extending the current tax treatment really does have a lot of impact on small businesses and family farms in our state.”
Missouri has more than 100,000 farms. Of those, Mr. Blunt said, 1,028 have values exceeding $5 million and would be impacted by the estate tax as currently written. That number would grow 14-fold if the tax rate reverts to the $1 million threshold.
The Missouri Farm Bureau Federation has concerns about that happening.
“A $1 million exemption is not high enough to protect a typical farm or ranch from estate taxes considering land values and the cost of machinery, equipment and farm buildings,” wrote Blake Hurst, an Atchison County farmer and Missouri Farm Bureau president, in a letter to Mr. Blunt earlier this year.
The senator said no aspect of the tax reforms of 2001 and 2003 created more uncertainty than those dealing with estates.
“You had to assume you were going to pass along your property at a time when you didn’t know what the rate was going to be,” Mr. Blunt said.
“I think it’s really important that whatever solution we come up with is more than a one-year solution. It needs to be a permanent solution.”
