Farm Lobby’s Estate Tax Handouts

Let our journalists help you make sense of the noise: Subscribe to the Mother Jones Daily newsletter and get a recap of news that matters.

If you thought the ag lobby only cared about cows, think again. As Kevin Drum explains in his article for the November/December 2009 issue, the farm lobby has it in for any climate bill that would limit their emissions. Not only that, they’ll keep on lobbying despite their successes.

The ag lobby isn’t just interested in climate, though. They’re also very concerned with the estate tax. Major players like the National Cattlemen’s Beef Association (NCBA) and the American Farm Bureau have loudly expressed their support for a bill currently in committee, HR 3905,  which would keep estate taxes at 2009 levels indefinitely. At 2009 levels, only estates worth $3.5 million ($7 million for couples) or more would be taxed at 45%. If Congress does not pass a bill, the 2009 levels would be suspended in 2010, and in 2011 estate taxes would be back where they were under George W. Bush in 2001: a 55% tax on all estates worth $1 million or more. However, today House Majority Leader Steny Hoyer said he expects the House will amend or revise the estate tax, but he didn’t specify exactly how. If Congress passes HR 3905, all estates under $5 million would be exempted from the “death tax,” as the NCBA calls it, and the taxation rate would be reduced from 45% to 35%.

So why do farms care about the estate tax anyway? Well, as the American Farm Bureau puts it, “Estate taxes threaten family-owned farm and ranches and the livelihoods of families who make their living in production agriculture.” That all sounds very warm and folksy, but the families they’re talking about are more likely to be the Hormel family than a small-time farmer. According to the Tax Policy Center, even under the rather generous 2009 estate tax parameters, only 0.2% of deaths will incur the estate tax. In fact, only 100 farms in the entire country would be slapped with an estate tax, and family-owned farms already receive special considerations. For example, they’re allowed to evaluate their property at its “current-use value, rather than its fair market value,” a reduction allowed up to $1 million, says a 2008 Tax Policy Center report. The few farms that do have to pay the estate tax only have to pay interest for the first five years, then can pay the rest in 10 yearly installments. The exemptions are so extensive that only a quarter of the farms that qualify for the tax actually have to pay it.

As Drum explains in his excellent piece, only the ag lobby would have the chutzpah to get an amazingly sweet deal from the government… and then ask for more. The Wall Street Journal estimates that the estate tax reform will cost the American taxpayers $233 billion over a decade. Benefits to mega-farmers like Hormel? Priceless.


Headshot of Editor in Chief of Mother Jones, Clara Jeffery

It sure feels that way to me, and here at Mother Jones, we’ve been thinking a lot about what journalism needs to do differently, and how we can have the biggest impact.

We kept coming back to one word: corruption. Democracy and the rule of law being undermined by those with wealth and power for their own gain. So we're launching an ambitious Mother Jones Corruption Project to do deep, time-intensive reporting on systemic corruption, and asking the MoJo community to help crowdfund it.

We aim to hire, build a team, and give them the time and space needed to understand how we got here and how we might get out. We want to dig into the forces and decisions that have allowed massive conflicts of interest, influence peddling, and win-at-all-costs politics to flourish.

It's unlike anything we've done, and we have seed funding to get started, but we're looking to raise $500,000 from readers by July when we'll be making key budgeting decisions—and the more resources we have by then, the deeper we can dig. If our plan sounds good to you, please help kickstart it with a tax-deductible donation today.

Thanks for reading—whether or not you can pitch in today, or ever, I'm glad you're with us.

Signed by Clara Jeffery

Clara Jeffery, Editor-in-Chief

payment methods

We Recommend