The McBride family had owned a twelve acre farm in the rural area of Issaquah, located just twenty minutes outside of Seattle, WA, since 1883. That is, until they were forced to sell their family farm due to the impending, overwhelming estate tax burden they would have faced had the farm been inherited by the next generation of McBride’s. The entirety of the eldest McBride’s wealth was tied into the land and therefore the children could not have afforded to pay the estate tax upon their father’s passing without selling the majority of the farm.
The case of the McBride family should clearly display the primary misconception about the estate (‘death’) tax – that it only harms the super-rich. In the case of this local farming family, the tax burdens they would have faced were too much to handle. The estate tax rate in Washington has an exemption level of $2 million with a rate of up to 20 percent, the highest in the country, on top of the federal rate of 40 percent. This means that had the farm been passed down to the next generation of McBride’s, they could have potentially owed up to 60 percent of the farm’s value in taxes alone. Outrageous!
A bill proposing a full repeal of the estate tax, HR 2429, has already been introduced by Rep. Kevin Brady [R-TX] and received enough signatures to pass the U.S. House. Considering the dire circumstances for families such as the McBride’s, this bill definitely deserves some serious consideration.
However, if this bill does not pass, perhaps a solid alternative option would be to support a bipartisan bill advocating for a simplification of the current estate tax system. Instead of promoting full repeal, the ASSET Solution for the estate tax problem would be to simplify the collection method via minimal annual payments as opposed to one gigantic lump sum post-mortem. The ASSET Solution for simplifying the collection method of the estate tax is an option worth considering not only because it’s buoyed by bipartisan support, but also because if it had been implemented earlier the McBride’s would still have their farm today.