<p>Granted, Ari - I don’t like them either. The big Sugar industry down here is particulary adept at finding federal dollars, when it appears they don’t need them. Tons of the stuff goes surplus every year.</p>
<p>For the farming families (you know, a Dad, a Mom, etc) I am willing to cut some slack…to hopefully maximize the number of small farms. Mega farm business receiving subsidies? Got to have that explained and I share your skepticism.</p>
<p>As to who gets what - it’s politics. I doubt if it’s fair.</p>
<p>I appreciate the Jeffersonian “good people of the soil” argument. Like I said, I’m all for keeping a sizable domestic agricultural industry afloat. </p>
<p>But a recent paper I read (I forget where) showed how some farms are now switching to corn, despite the fact that they can grow very little of the stuff due to their location, at the expense of the federal dole.</p>
<p>In that case, I’m all for saying to the small farms, “Okay guys, cut it out.”</p>
<p>Agreed - market realities must control the market. Subsidies should help keep them in business - when needed. A bit of protectionism for the little guy. The huge companies? No.</p>
<p>I like ‘salt of the earth’, better. Does that fit, too? :)</p>
<p>Fundingfather, with all due respect, giving me an example of someone who didn’t lose their farm, and who appears to have been motivated by nothing more than an understandable desire to maximize the value of their inheritance, is hardly a refutation of the fact that nobody can find a single family farm lost due to estate taxes. It is true that a lot of heirs choose to sell rather than continue the family business, but they’re not “forced to” by taxes; they make a rational decision to maximize their wealth. The poor but honest children of farmer Brown forced off their homestead by the evil revenooer is a powerful image - but it’s horsepucky. The math isn’t really very tricky: you get your first couple of million dollars of equity tax free, and pay a tax that’s less than 50% on the rest - how the heck can you be unable to continue in business with that kind of capitalization, if you really want to?
<p>kludge, with equally due respect, the heirs that I am talking about DID lose their farm. They no longer own it - the town does. The only good news for them is that they can continue to pay the town rent for the right to be farmers on what was once their parent’s farm. The fact that a pointy headed professor in Iowa claims this to be a myth doesn’t make it one.</p>
<p>“kludge, with equally due respect, the heirs that I am talking about DID lose their farm. They no longer own it - the town does”</p>
<p>But FF, the means were already in place for them to avoid the whole issue. When someone who can’t swim turns down a life jacket, then drowns because the water was deeper than expected who is at fault? </p>
<p>All it takes is a little bit of money (under $500) and a little bit of time and you can protect the family farm. Thousands of people have done it LEGALLY. Their have always been laws in place to make things workable. </p>
<p>As far as calling someone “pointy headed” wouldn’t that apply to this family? I would think it to be totally careless not to learn more about the situation when assets were involved. </p>
<p>Kludge is not at fault for pointing out something that is true. You may not know all the details as I’m sure ignoring what to do about a will, trusts and gifting is not something these folks will brag about. </p>
<p>Pretty Simply do you have a will? Why? because you don’t want the government to decide what to do with your assets? right? you do have a will don’t you?</p>
<p>If someone as stupid as myself has enough sense to set up wills, trusts and gifting for my assets… and I know you feel I’m stupid. What about these folks? That must make them like a box of rocks. no?</p>
<p>Opie, if you met them you may indeed conclude that they may be close to a box of rocks in terms of intelligence - but a very nice box of rocks that doesn’t deserve to have their family farm taken away from them.</p>
<p>I’m serious, FF - I understand that there’s no way for you to have actual knowledge of all of the aspects of the situation - but are you honestly trying to tell me that with millions of dollars in equity handed to them the heirs couldn’t continue to farm their land? But somehow now they can pay rent on it and make a profit with their business? Have you even thought this through to see if it actually makes any sense? Because it doesn’t. </p>
<p>I’m sure that selling the land at a high value was enticing to the heirs; even after taxes they had to pocket millions of dollars. But if keeping the farm were the issue the means of doing that were obviously there. Even if the parents had absolutely no assets other than their land (unlikely) the heirs could borrow against the property to pay the taxes, and continue the business paying the mortgage payments instead of rent. Instead they sold for millions, pocketed the cash, and now farm the land paying rent instead of loan payments. The only difference is cash in pocket. Like I said, I don’t blame them, but claiming that they were “forced” to sell because of estate taxes - while probably a good cover story locally, for sympathy, etc., just doesn’t pass the smell test.</p>
<p>Seriously, FF, lots of people have looked high and low for a legitimate case of a family farm being lost due to estate taxes. Nobody’s ever found one. I don’t think you’re the exception.</p>
<p>In Washington, they just ran an initiative to abolish the existing estate taxes. When newspapers analyzed the data, they could find only 211 families in the estimate that would have been affected by the rollback, of which farmers and business owners were a tiny fraction.</p>
<p>“Opie, if you met them you may indeed conclude that they may be close to a box of rocks in terms of intelligence - but a very nice box of rocks that doesn’t deserve to have their family farm taken away from them.”</p>
<p>Did you ever think that maybe this was daddy’s plan? Hey, I’m in the business and it wouldn’t be the first time somebody wanted their kids and wife to suffer or had no love for em when the front door was closed. As I said you just may not know the who, why and where of this one. </p>
<p>I can understand your point about them being nice people and it is too bad, but even nice people can be at fault for their inactions. It doesn’t make the law wrong or evil as I’ve said there are many ways to skin that cat to reduce the estate liability. It’s like blaming the stop sign when somebody ignores it and drives through the intersection and has an accident. Is it really the sign’s fault? It’s always been there all you have to do is look at it. </p>
<p>I see the national estate tax coming back in some modified form within the next couple years. If GW fights it, the dems will just let it revert back in 2010 to the old scales and revenues will really increase. This issue might be the first one where GW and the demos can work together to reach across the isle to find reasonable breakpoints in the tax code and allow some of the past ways to reduce the tax obligation. </p>
<p>If not, get a will, create trusts and plan on gifting to your kids and grandkids and any organization you want your money to go to. Americans have sheltered estate taxes for decades somebody will remember how.</p>
<p>Once again, kludge, I am amazed that you have such insight of a situation all the way from California. If these people had all the options that you claim, and are so obvious to everyone, why did it take the town several weeks to come up with a solution that it did and yet failed to come up with the solution that you came up with in a matter of minutes? </p>
<p>And, no I seriously doubt that the parent’s had any cash to pay pay the taxes. It’s lucky that the house that they lived in (and that the heirs still do) was not condemned.</p>
<p>To minis point the WA estate tax only incurred after 4 million in assets were sheltered. Also it was not a really agressive scale. A 4.5 million dollar estate would have an estate tax liability of $5,000. </p>
<p>Again, provided the family actually got off their backsides created a will and trusts to allow that 4 million to pass along.</p>
<p>Well, FF, it sounds like the highest and best use of the property wasn’t as a farm - you mentioned developers? Absent that, how does a quasi-condemnable house and land get above the estate tax threshhold? Are you sure the issue wasn’t property taxes? Because frequently when an area has developed around a farm the value of the land as something other than a farm increases dramatically, and, depending on local law, the property taxes can go up based on the value of the property as condos or whatever. One way around that would be to have the property be acquired by a government agency and leased back - because people wanted to maintain an economically irrational use for the land. That scenario would fit your story. Estate tax just doesn’t. Sorry.</p>
<p>You are all wet FF. Most farmers that I know of want to plant houses, including this one. The agriculture that you want to have is very imperfect that benefits only the very big, subsidized farms. Very communistic in its terminal model. </p>
<p>Thank goodness that messages get timed out.</p>
<p>I don’t see why a lot of these farms can’t be paid to convert to solar or wind farming, so to speak. Let it go to SOMETHING that’s going to be consumed.</p>
<p>Then again, with soy diesel and corn ethanol, things may change.</p>
<p>^I have no problem with either. Electricity can always be sold, and it does not rot. </p>
<p>Clean burning diesel is probably the way the wean the US off of gasoline engines. I am dying to see teenagers build hot rod diesels…13 speeds with a splitter. Jake brakes will replace laying rubber for teenage boys. :)</p>
So, let me get this straight, because most farmers that you know want to sell their farms, this gives you perfect insight into **all **farmers such that you can declare me all wet. These are very simple, salt-of-the-earth type people who just want to farm their land the way their family has probably done it for generations.</p>
<p>And, kluge, local property tax laws do not provide for taxes on farmland to rise based on what it could be used for. That’s why the people around here who have McMansions on 5 and 10 acre plots grow pine trees (as a Christmas tree farm) to get the farm tax rate.</p>
<p>No, my comment was strictly a response to kluge’s concept that perhaps the thing that caused the heirs to lose the farm was a sudden and significant increase in the property taxes.</p>