FLA Wins the Death Tax Battle for Private Forest Landowners
The Death Tax = Unsustainable Forests
Each year across the country, thousands of private forest landowners across the United States pass away, leaving their working forests to their heirs. In many cases, those heirs face an oppressive tax triggered by their inheritance in the form of the Federal Estate Tax, also known as the Death Tax. Faced with paying up to 45 percent of the value of the estate in 9 months, many are forced to harvest timber prematurely or sell the land for uses other than working forests. This consequential effect has greatly added to America's annual loss of forest, and if the Federal Death Tax revives, it will continue to increase losses as a new generation of landowners strives to leave us with a legacy of healthy and thriving workings forests.
The New Year has begun and for the first time in almost 100 years, the American public is free from the burdens of the onerous Federal Death Tax. While this is only a one year reprieve and Congress has the ability to pass retroactive legislation to raise the current 0 percent Death Tax, the Forest Landowners Association (FLA) still takes pride in defeating repeated attempts to raise the 2010 Death Tax. As the only national association representing private forest landowners that took this position in 2009, FLA worked hard through direct lobbying, Political Action Committee (PAC) contributions, and the mobilization of hundreds of landowners in key congressional districts and states to ensure that influential members of Congress understood that most Americans are tired of seeing healthy forests being prematurely harvested, forestland fractured and/or developed. Additionally, the pressure placed on the small businesses that care for our forests to close operations, lay off employees, or reduce services continues to adversely affect communities across the country.
The War is Not Over
While we experienced an impressive victory in 2009 by thwarting efforts to raise the Death Tax in 2010; the tax is scheduled to return in 2011 at an oppressive 55 percent rate for everything over $1 million. This is completely unacceptable, and the Forest Landowners Association is beginning the long battle to ensure this does not happen. FLA has always favored a full and permanent repeal of the Death Tax; however, the current makeup of Congress does not make that a reality. To create the best possible circumstances for forest landowners, FLA is working with congressional leaders to find acceptable compromise for a more common-sense Death Tax rate. A reasonable compromise of 35 percent with a $5 million exemption is supported by FLA.
Death Tax Strategy
Prepared by the law firm of Morris Manning & Martin LLP, an FLA member, this strategy memo is designed to help private forest landowners with their estate planning during this turbulent time in Death Tax policy.