Family Woodlands and the Estate Tax
With all the deal-making that has gone on with the extension of the Bush tax cuts, you might be surprised that the estate tax has become the lightening rod for those who oppose the tax cut package.
Representative Chris Van Hollen (D-MD) put it this way: “There is one thing that just was the choking point, and that deals with the estate tax break.”
When the Senate moved to cloture on the vote yesterday, the Washington Post breaking news alert said that, “House Democrats are particularly upset about a provision that would exempt estates worth up to $10 million from a revived estate tax.”
For family forest owners all over this country, fixing the estate tax is more than just a “break.” It could mean the difference between keeping their family woodlands in the family or selling their forest land to pay the tax bill.
If Congress doesn’t fix the estate tax by December 31, 2010, it will revert back to 2001 levels, which could put millions of acres of family forest land at risk. The impending intergenerational transfer of millions of acres is looming, making this even more urgent: 60 percent of private forest owners are 55 years or older and 15 percent are 75 years or older.
If a deal on the estate tax isn’t struck and the estate tax reverts back to 2001 levels, millions of acres of America’s forest heritage will be at risk. The number of family forest owners caught in the estate tax web will increase by 400 percent compared to 2009.
So while there’s been jokes floating around the forestry community that 2010 was a good year to die if you were a forest owner (no estate tax collected in 2010), the jokes don’t hide the bona fide concern that the estate tax is one of the biggest threats to America’s forests. Leaving their legacy to the next generation is also the number one concern of woodland owners across America.
The long-term fix to ensure America’s family forests stay forests is to pass the estate tax at the $5 million exemption level, 35% tax rate, and include a provision such as S. 3664, the Family Farm Estate Tax Deferral Act of 2010 and HR 5475. These bills allow families to defer their estate taxes – as long as they keep their forested land forest and manage their woodlands sustainably. This combination is the best solution to the estate tax that will ensure America’s forests stay forests for the benefit of all of us.
When you consider that more than 25 percent of America’s drinking water comes from family forests, 60 percent of at-risk wildlife rely on family forests for their habitat and 12% of carbon emission are stored in private forests – these public benefits are worth protecting, along with the rural jobs and wood products that family forests create. It’s time to fix the estate tax and protect America’s family forests.
