Local News

Farmers say inheritance tax could force generations off land

Posted December 28, 2012

Jeff Allen is with Beth Moore Produce of Johnston County, where farming has been the family business for more than 40 years.

The plan is to keep it that way.

“One of the sons will take over and, hopefully, it will continue to go on just like it has for generations,” Allen said.

But he and many other farmers are worried that a change to the inheritance tax could bring that legacy to an abrupt end if the federal government doesn’t reach a resolution on the so-called “fiscal cliff.”

Currently, when a farm owner dies, the heir doesn’t owe taxes if the estate is valued at less than $5 million. Any amount beyond that is subject to a 35 percent tax rate.
But if Congress doesn't extend that tax cut by Jan. 1, the exemption next year would shrink to $1 million, and the tax rate would go up to 55 percent.

“It has the potential for taking many people who think they're going to farm, who are farming today – younger people – to wipe that generation of farmers off the farm,” said Larry Wooten, president of the North Carolina Farm Bureau.

The inheritance tax does bring in a bit of revenue for North Carolina. According to the state Department of Revenue, the tax put almost $24 million into the General Fund last year.

Mike Strowd, co-owner of Maple View Farm in Hillsborough, said the issue is a pressing one for North Carolina farmers, especially those who want their children to carry on the family business.

“There's no way in the world they can actually pay the inheritance tax and keep on trying to do what the parents did, whether it's planting corn, milking cows or growing soybeans,” he said.

To grow those crops, millions of dollars in equipment, land and labor is needed, Strowd said.

So, the farmers wait – along with the rest of the nation – to see what will happen as the Jan. 1 deadline for lawmakers nears.

“It would be a big hit,” Allen said.
 

19 Comments

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  • cwmllc1952 Dec 31, 3:08 p.m.

    Here's a fact for you.
    34% Federal Tax
    7% NC State Tax
    6.75% Sales Tax NC and Wake County
    County Property Tax on all you own EVERY year Land,Houses,Cars,Boats,Trailers,Tractors,etc.
    Call it what you want but Inheritance Tax is not on my Children it is the last effort to get all they can out of me.
    The only people who believe in Inheritance Tax are the ones who didn't work for what they have or don't have anything.

  • superman Dec 31, 10:48 a.m.

    Owing land valued at over 5 million dollars is kinda rich. The state only collected 25 million in inheritance taxes so not many people even pay tax. If owning land worth 5 million is not rich--how much would you have to have to be "rich"?

  • WASP Dec 28, 7:58 p.m.

    Owning land does not mean you are rich.

  • samdutes Dec 28, 7:55 p.m.

    Sell the land before you die,,, or give it to them,,, lots of ways around this,,, Jeezz --oleguy

    Thats beside the point, you shouldn't have to go around anything to leave land/businesses whatever it is to keep the government from getting it. Heck, it's already been taxed at least 3 or 4 times.....

  • welfarequeen Dec 28, 7:52 p.m.

    Rich people shouldn't be able to just leave a pile of cash to their brats and not have it taxed. Then the brats ride around like they don't need to work and act like THEY did something, when the only thing they did was get born. I'm cool with folks making as much money as they want to. Just don't think that you can shift the pile to your family without paying your share to our country that helped make you successful to begin with!

  • Rebelyell55 Dec 28, 7:50 p.m.

    One thing they should do is make a corp. out of the farms. That way they'll get the republicans corp. welfare and keep the farm. If not, they'll play right into the hands of big farm Corp. ran by hedge funds that been wanting to get their hands on these farms for years.

  • WooHoo2You Dec 28, 7:38 p.m.

    “It has the potential for taking many people who think they're going to farm, who are farming today – younger people – to wipe that generation of farmers off the farm,”

    This is called, "democrats leveling the playing field"!!-paultaylorsr100

    So they don't have inheritance taxes in 'red states?' Your know the ones where republicans have a majority and write tax code. But but but thats different ;)

  • Nancy Dec 28, 7:28 p.m.

    The death tax has a long history, but originally it was levied to fund a war, when the war was over, they dropped the tax. That was when a tax was indeed temporary and not counted as annual revenue to waste.

    We've lost our way, we have huge budgets for things the government should NOT be funding and those programs continue to increase while they are like crack addicts looking for more revenue instead of cutting excess programs and costs out of the budget.

    We're upside down.

  • paultaylorsr100 Dec 28, 7:24 p.m.

    “It has the potential for taking many people who think they're going to farm, who are farming today – younger people – to wipe that generation of farmers off the farm,”

    This is called, "democrats leveling the playing field"!!

  • highvolt1 Dec 28, 7:16 p.m.

    Double taxation, any way you look at it. Tax us to death

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