4 ms·

The US had same problem with family farms. The farm itself was very valuable, so when being left to the children as inheritance, it was heavily taxed. But, th

The US had same problem with family farms. The farm itself was very valuable, so when being left to the children as inheritance, it was heavily taxed. But, this is a problem, because what is left is not enough for the kids to make a living. So in the act of trying to tax the rich with inheritance, there are some lower/middle layers getting hit very hard. Taxes don't have to be a flat number, there should be exemptions carved out like for family farms. But of course, anything can be gamed.

rahimnathwani 2y ago
What is special about family farms, that doesn't apply to other family-owned businesses?
- mickael-kerjean 2y ago
  your typical business isn't working at the same level of the maslov pyramid than a farm. I don't want a world where only the wealthy can afford to give milk to their kids
  - FrustratedMonky 2y ago
    I think because farms need to be a certain size to be effective. And, even though they might be worth a lot as real-estate, the land could be worth millions, the people farming could be poor. Guess, to your point. If a family owns a dry cleaner, similar situation.
- throwaway7ahgb 2y ago
  Because when the US was settled (not that long ago), 90%+ of people were farmers. Now the East and West coast voters see no value in these farms so want the government to tax them away. They also naively think that the local farmers market can supply the country's food supply.
Terr_ 2y ago
> The US had same problem with family farms. [...] it was heavily taxed [...] what is left is not enough for the kids to make a living Math or it didn't happen! I say that because I've seen this kind of claim many times, and usually either (A) the Federal Estate Tax has no real affect on what happens or (B) their definition of "family farm" is wildly grandiose. https://www.cbpp.org/blog/the-myth-that-the-estate-tax-threatens-small-farms https://www.cbpp.org/blog/the-myth-that-the-estate-tax-threa...
- ryandrake 2y ago
  Exactly, in the US, the estate tax minimum is over $13M. Under that, and it's not subject to tax. If you inherit a $14M farm (!!) and have to pay a little estate tax on it, well, I'm not exactly weeping for your misfortune. I would be happy to take that farm off of you and figure out how to pay the tax, if you're so against taxes.
  - FrustratedMonky 2y ago
    I think the issue is that the land can be worth over $13M, but the income from farming it is low, so the people living on the land are poor. Then the taxes against the $13M are beyond what the family can pay, so they loose the land. Or the land gets whittled down as parts are sold off to pay the taxes on the rest. The land is worth way more than the income from farming it.
    - throwaway7ahgb 2y ago
      100% I come from a family of farmers. The land is worth a lot but also has large notes on them. If you see the way these farmers live, NOBODY would call them rich. They never sell and the land gets passed from generation to generation. All the income from farming goes back into the farm (notes, taxes, supplies, maintenance).
      - ryandrake 2y ago
        Huh... I must be missing some huge bit of information, then. Using my example, how is the business worth $14M if it's not making, say, $1M a year? If it's not making any money, wouldn't the value be much less? Maybe the current business value is very low, but the land is worth $14M because someone else could make more money with it. In that case, the wisest decision would be to sell it, use the proceeds to pay off the taxes and whatever liens are hanging around, and then invest the balance more productively. Say you have $10M left over after settling taxes and debts. That's still a huge windfall, and anyone living on that farm would never be poor again. Invested wisely, and that family never works a day in their life again. Hell, a risk-free 30 year US Treasury bond is paying in the neighborhood of 4.5% now. That windfall could be turned into a risk-free salary of $450,000/yr, with zero investing skills.

rahimnathwani 2y ago

What is special about family farms, that doesn't apply to other family-owned businesses?

mickael-kerjean 2y ago
your typical business isn't working at the same level of the maslov pyramid than a farm. I don't want a world where only the wealthy can afford to give milk to their kids
- FrustratedMonky 2y ago
  I think because farms need to be a certain size to be effective. And, even though they might be worth a lot as real-estate, the land could be worth millions, the people farming could be poor. Guess, to your point. If a family owns a dry cleaner, similar situation.
throwaway7ahgb 2y ago
Because when the US was settled (not that long ago), 90%+ of people were farmers. Now the East and West coast voters see no value in these farms so want the government to tax them away. They also naively think that the local farmers market can supply the country's food supply.

Terr_ 2y ago

> The US had same problem with family farms. [...] it was heavily taxed [...] what is left is not enough for the kids to make a living Math or it didn't happen! I say that because I've seen this kind of claim many times, and usually either (A) the Federal Estate Tax has no real affect on what happens or (B) their definition of "family farm" is wildly grandiose. https://www.cbpp.org/blog/the-myth-that-the-estate-tax-threatens-small-farms https://www.cbpp.org/blog/the-myth-that-the-estate-tax-threa...

ryandrake 2y ago
Exactly, in the US, the estate tax minimum is over $13M. Under that, and it's not subject to tax. If you inherit a $14M farm (!!) and have to pay a little estate tax on it, well, I'm not exactly weeping for your misfortune. I would be happy to take that farm off of you and figure out how to pay the tax, if you're so against taxes.
- FrustratedMonky 2y ago
  I think the issue is that the land can be worth over $13M, but the income from farming it is low, so the people living on the land are poor. Then the taxes against the $13M are beyond what the family can pay, so they loose the land. Or the land gets whittled down as parts are sold off to pay the taxes on the rest. The land is worth way more than the income from farming it.
  - throwaway7ahgb 2y ago
    100% I come from a family of farmers. The land is worth a lot but also has large notes on them. If you see the way these farmers live, NOBODY would call them rich. They never sell and the land gets passed from generation to generation. All the income from farming goes back into the farm (notes, taxes, supplies, maintenance).
    - ryandrake 2y ago
      Huh... I must be missing some huge bit of information, then. Using my example, how is the business worth $14M if it's not making, say, $1M a year? If it's not making any money, wouldn't the value be much less? Maybe the current business value is very low, but the land is worth $14M because someone else could make more money with it. In that case, the wisest decision would be to sell it, use the proceeds to pay off the taxes and whatever liens are hanging around, and then invest the balance more productively. Say you have $10M left over after settling taxes and debts. That's still a huge windfall, and anyone living on that farm would never be poor again. Invested wisely, and that family never works a day in their life again. Hell, a risk-free 30 year US Treasury bond is paying in the neighborhood of 4.5% now. That windfall could be turned into a risk-free salary of $450,000/yr, with zero investing skills.