Senator Barbara Boxer’s True Estate Tax Record

by Adam Nicholson - No Comments
Posted on September 2nd, 2010 11:25 am

The California senate race is in full swing and the death tax is a top-tier issue. A sign of the importance of the issue is the attempt by both candidates – Democrat Senator Barbara Boxer and Republican candidate Carly Fiorina – to position themselves in opposition to the death tax. Given California’s typically pro-tax culture, this is an impressive development.

However, only one candidate has consistently supported repeal. Carly Fiorina has signed AFBI’s Death Tax Repeal Pledge, publicly committing to support permanent repeal. If elected, AFBI members and California voters will hold her accountable to support repeal.

Senator Boxer, who has not signed the pledge, likes to talk about her endorsement for a farm “carve-out” – which exempts farmers from the estate tax if they don’t sell their land, (but with lots of caveats). Senator Boxer claims that this proposal would protect family farms from being sold.

Her voting record, however, shows a consistent record in support of keeping the death tax alive. In each repeal vote, Senator Boxer can be found in the “nay” column, preventing family business owners and farmers from getting death tax relief.

Senator Barbara Boxer’s voting record:

• Voted NO on DeMint permanent repeal measure (July 2010)

• Noted NO on Kyl/Lincoln “compromise” proposal, a 35 percent rate with a $5 million expemtion (April, 2009)

• Voted NO on raising the death tax exemption to $5 million from $1 million (Feb., 2008)

• Voted NO on raising estate tax exemption to $5 million (Mar., 2007)

• Voted NO on supporting permanence of estate tax cuts (Aug., 2006)

• Voted NO on permanently repealing the death tax (June, 2006)

• Voted NO on tax relief including 2010 temporary death tax repeal (May, 2001)

• Voted NO on permanently repealing the death tax (July, 2000)

Farm carve-outs sound nice on paper (and sometimes on the campaign trail), but they are just more bad news back on the farm. Farm carve-outs typically involve a “deferred” death tax as long as the farm is held in the family’s hands. Hence, a farmer who inherits land from the previous generation owes no death tax – as long as he doesn’t sell. This continues through multiple generations. However, if he should decide to sell any land, he will owe taxes on all the taxes that have been deferred. At a 55% rate estate tax (the rate in 2011 if Congress does not act before the end of 2010), a family could owe a 110% death in just two generations.

While most families do not want to sell, some are forced to sell in order to keep cash flow in the business. Others may decide to sell some land while buying other, more arable land. There are multiple reasons that a family may want to sell some of their land. Yet Senator Boxer’s proposal would trap them.

Furthermore, the specifics of carve-out eligibility has always been very complex. AFBI has considered these carve-outs in the past, only to find that obtaining a carve-out for a farmer is far from guaranteed.

Repeal is the only way to let farmers do what they do best: raise their crops and livestock and tend the land for future generations.

Finally, the carve-out throws family businesses owners under the bus. The best death tax solution should save the future of both family business owners and farmers.

Fiorina knows that actions – specifically, Senate action to repeal the death tax – is the only way to support family farmers and business owners. Senator Boxer’s words will fall on deaf ears unless she commits to real death tax relief – death tax repeal.

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