Under the current tax law, Coffee County farmer Donnie Smith
would find it hard to leave his fifth-generation farm to his
children.



“A family farm doesn’t have a lot of cash assets,”
Smith
said. “When the government comes to collect the death tax,
that means having to pay dearly to pass on the farm.”



Smith said his children all love farming but have sought jobs
in other areas in the current farm crisis. He would still like
to leave his farm to his family, though, and let them decide what
to do with it after he’s gone.



“They would have to sell it off to pay the tax right
now,”
he said.



Will the repeal of the estate tax help
the average Georgia farmer?



“This question basically requires a case-by-case analysis, since
long-term capital gains tax rates are partially dependent on an
individual’s marginal ordinary income tax rate, ” says Keith
Kightlinger, an economist with the University of Georgia College
of Agricultural and Environmental Sciences. “The answer will
vary with the facts and circumstances of each individual.”



U.S. Rep. Saxby Chambliss, R-Moultrie, told a group of Georgia
farmers April 16 that the federal estate tax, also known as the
death tax, should be repealed as part of President George W.
Bush’s
tax plan.



Pass It Down




“Elimination of the death tax would give the American farmer
the opportunity to pass the family farm on to the next generation
of family farmers without the federal government reaching into
their pockets for a 50 percent to 55 percent death tax,”
Chambliss said.



Many farmers like Smith aren’t able to pass family farms on to
the next generation, he said. “Their children are not able
to be part of the great heritage of American farming,”
Chambliss
said. “That is unfair and un-American.”



In Bush’s plan, farmers will also benefit from permanent
extension
of research and development tax credits, Chambliss said, which
will allow companies to expand research in agricultural
technologies.



The House of Representatives passed Bush’s $1.6 trillion tax
reduction
plan. But the U.S. Senate made adjustments.



Will It Become Law?



“The Senate’s plan is for around $1.2 trillion,”
Chambliss
said. “It is headed for conference, and hopefully it will
come out closer to President Bush’s $1.6 trillion.”



Because “of the new sheriff (Bush) in town,” Chambliss
said, the new tax plan will be pushed through so the tax surplus
can quickly be returned to taxpayers, and family farms and small
business owners can leave their hard work to the next
generation.



“It will be law this year,” he said.



“The tax code now is complex and not fair,” Chambliss
said. “We need to send the tax money back to the taxpayers
across the state of Georgia.”



Big Return for
Georgians



If the Bush plan becomes law, it could mean big money for Georgia
taxpayers, Chambliss said. In the April 16 meeting, he
symbolically
signed a giant U.S. Department of Treasury check to Georgia
taxpayers
for $29.5 billion, the amount that could be returned to Georgians
over the next 10 years.



In the Bush plan, he said, a Georgia family of four making: