By Caroline Halter
The Republican tax plan seeks to eliminate the estate tax, a 40% tax on the value of land and other inheritances over $5.49 million.
The Tax Policy Center estimates the estate tax will affect fewer than 100 farms in 2017, but eliminating it is still seen as a big win for rural communities in Texas and across America.
“I think we all know people who’ve lived through horror stories of the founding generation passes away, the next generation inherits the farm and then ends up having to sell it to pay the estate tax,” explained Tiffany Dowell Lashmet. She’s an attorney who specializes in Agricultural Law at Texas A&M.
Those stories became rarer after the estate tax threshold was raised from just $1 million to over $5 million in 2012 and indexed for inflation. But, they’re still cited by lawmakers who oppose the tax.
Tyler Simonsen comes from a ranching family in West Texas, but he worries the Republican approach is merely a windfall for the wealthy.
“The Wall Street types definitely want to get rid of the estate tax. It’s just more money for them once they do,” he said. “But for the ranchers, their land really is the lifeblood of their families.”
Instead of eliminating the tax, he’d like to see exemptions for ranchers.
“Getting rid of it just would, in my opinion, really hurt our system. It’d hurt the country more than anything,” said Simonsen.
About 5,000 individuals will pay the estate tax in 2017, and almost all are in the top 10 percent of income earners in the United States. But, eliminating it is still seen as a meaningful policy change in rural parts of the state.