The Perfect Storm
Once Congress gets back to Washington after the Thanksgiving break, there will be more focus on what to do about the “Bush tax cuts for the wealthy.” Unfortunately, that amorphous phrase misses the nuances and particular tax cuts that were part of the Economic Growth and Tax Relief Reconciliation Act of 2001. For example, embedded within numerous provisions was the repeal of the estate tax in 2010. This repeal is set to expire at the end of 2010, resetting the estate tax to 2001 levels – 55% tax on estates valued at more than $1 million.
That will put thousands of family forest owners at risk of losing what they cherish most – and what all Americans need -healthy, productive forests.
Most of America’s forests are owned by families – not the government and not by large land holdings. Sixty-six percent who own 10- 999 acres, have incomes of $25-99,000, according to data from GfK NOP, Roper Public Affairs, for the Yale School of Forestry and Environmental Studies.
Twenty-seven percent, (owning 10-999 acres) are 55-64 years old; and 23% are 75 years or older. According to the same study, 56% say that, “keeping land intact for my children/heirs” is their top concern.
It’s a perfect storm brewing. A huge intergenerational transfer of forest land in the works, just at the time when the estate tax could be moved back to 2001 levels, increasing the number of family forests caught in the estate tax web by 400%, compared to 2009. This could put millions of acres of forest land at risk.
America’s private forests provide a multitude of public benefits. Right now more than 10% of carbon emissions are stored in forests – and this could increase to nearly 20% with better management. More than 25% of our country’s clean water originates in private forests. Sixty percent of at-risk wildlife depend on private forests for habitat. And most of the wood products we all use everyday, come from private forests.
At the American Forest Foundation we believe there is a way to protect these public benefits and at the same time ensure better management of America’s forests. We support S.3664, the Family Farm Estate Tax Deferral Act of 2010 which would exempt family forest owners from paying estate taxes IF – and this is important – IF they keep their forested land forest and manage their woodlands sustainably. Learn more about this legislation. Only 8% of forest owners have a written management or stewardship plan for their woodlands, so this legislation could have multiple benefits by helping more forest owners better manage vital natural resources.
Families should not be forced to sell their woods or harvest before they want to because they can’t pay the estate tax bill. Let’s get smarter about tax policies and ensure they don’t take away from all of us what we need – healthy, productive forests.
Tell your elected officials today to fix the estate tax and help protect America’s forests!
