Be Careful What You Wish For
I was speaking at the American Farm Bureau meeting today and had a warning
I flew into San Antonio yesterday and had a speaking session at the American Farm Bureau convention this morning on the outlook for income taxes.
During the Q&A session, a farmer asked about getting rid of estate taxes.
My response was we need to be very careful when it comes to getting rid of estate taxes since the offset may be something much worse for farmers. That would be either elimination of step-up in basis or some type of capital gains tax at death.
Canada has a system of capital gains tax at death. This Congress will not get rid of step-up or a capital gains tax at death, but what happens if they eliminate the estate tax.
Sometime in the next few years, the progressives will be back in control of everything, and they will simply impose a capital gains tax at death and simply say you got no estate tax; therefore, you should be willing to pay a capital gains tax.
I am fairly certain most farm couples would much prefer the current estate tax system then having to pay capital gains tax at death. That tax for almost all farm couples would be much higher than an estate tax (if you even owe it).
This is always the law of unintended consequences, and they sometimes come at you without you seeing it until it is too late.
We will keep you posted.