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January 1997, my grandmother signed the final papers to divide up
our family ranch, the Grewell E2 in south-central
Montana.
Land cobbled together from my great, great grandfather's twentieth
century homestead faced the estate tax if Grandma passed away. (As
of this Valentine's Day, she was still alive, kicking, and on a
steamy date.) In preparing for the future, we Grewells went through
an expensive process of partitioning the ranch to avoid our own
date with the dreaded death tax.
Don't let the E2 family brand fool you. My uncles and aunts were
not, and are not, wealthy cattle barons. Uncle Rick used all of
his mechanical skills to keep machinery running on the place. Every
dollar saved went to keeping the E2 alive. Each calf that didn't
survive the winter birthing elicited pained grimaces among relatives
who now knew to expect fewer school clothes or a smaller Christmas.
So far, however, my family has been lucky. The 1997 estate planning
made a tough year for some, but we survived. Others were not so
fortunate.
American Farm Bureau Federation President Bob Stallman notes that,
"Too often, farm and ranch families are forced to sell their land,
buildings or equipment to meet the financial burden of Uncle Sam's
death tax — a payment the government demands in cash." Frequently,
he notes, "that land is forever taken out of production and lost
to development." This new development comes at the expense of something
nearly as dear to my family as the ranch: the environment.
Nearly 75 percent of all wildlife and half of all endangered species
in the United States live on private lands. On our place, wild turkey
and deer forage for feed. Sandpiper cranes, bald eagles, and hawks
soar overhead. Though we
| “Farms
and ranches provide the open spaces and feeding plots
that wildlife require. But the federal estate tax turns
the habitat into strip malls and housing subdivisions.” |
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seldom
care for them, mountain lions and coyotes prowl the area. An occasional
moose has even been seen. Farms and ranches provide the open spaces
and feeding plots that wildlife require. But the federal estate
tax turns the habitat into strip malls and housing subdivisions.
A new report by Mississippi State University and the U.S. Forest
Service finds that non-industrial forestlands suffer, too. Of the
approximately 1.4 million acres of forest lands sold every year
because of the estate tax, one-fourth (350,000 acres) are lost to
development, along with all the black bears, elk, eagles, and hares
that tarry there. This is equivalent acreage to half a Yosemite
National Park per year!
Even if land is not sold to pay the tax, habitat can end up altered.
The Mississippi State/Forest Service study estimates that 2.6 million
acres of forestland are harvested annually to pay the tax.
The federal estate tax is levied when property worth more than $675,000
passes from one generation to the next upon the owner's death. While
this sounds like a large inheritance, the unexpected income is often
not a liquid asset. Rather, it is a family ranch like the E2 or
a tree farm like those studied by the Forest Service and Mississippi
State. And because landowners like my relatives are frequently in
the position of being dirt rich, but dollar poor, the tax topples
farms just as parts are sold off to pay the government bill.
Fences are then erected. Roads are built. Wildlife find migration
corridors cut off and foraging grounds destroyed by new development.
With all of the damage done, one would think the estate tax must
be a major moneymaker to survive repeal. The Joint Economic Committee
reports, however, that "the estate tax raises very little, if any,
net revenues for the federal government." In fact, the funds taken
in from the tax barely cover the costs of assessing it and yet the
tax remains.
My grandmother turned 75 last year. When Valentine's Day rolls around
again, I truly hope that she and the E2 are still alive and kicking.
But with its growing rap sheet, I cannot say the same for the estate
tax.
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