John C. (Jack) Fisher, Ohio Farm Bureau executive vice president

A Matter of Fairness

With a repeal of Ohio’s death tax in play, I’ve found myself poring over reams of reports and studies with titles like A Distributional Analysis of the Ohio Estate Tax and The 2010 ALEC-Laffer State Economic Competitiveness Index. I’ve absorbed mathematical formulas on decedent growth rates, auto correlation coefficients and feasible GLS with cross-section fixed effects. I’ve immersed myself in piles of policy papers and have gleaned data from wonks, think tanks and eminent experts. Following an exhaustive, scholarly assessment, I believe I am prepared to articulate a learned opinion. The estate tax is [email protected]#$%.

Please forgive my ineloquent summation. It stems from instinct rather than intellect. It comes not from studying spreadsheets but rather from listening to neighbors, friends and Farm Bureau members. It’s my gut, more than my brain, that tells me a tax on dying is fundamentally unfair.

I have yet to hear a version of the American dream that includes working hard, investing wisely and spending sensibly so that we can leave something for the government. When it’s time to meet our maker, what’s left behind should be for our kids, not the Statehouse or city hall. Apparently, lots of folks agree. A Tax Foundation survey of more than 2,000 Americans rated the estate tax the most unfair of all taxes levied; a separate survey indicated that 64 percent of Ohioans want it eliminated. The dislike of estate taxes crosses political beliefs and income levels; even Ohioans who likely won’t have to pay it want the death tax dead.

Average folks don’t like our government double-dipping. We’ve already paid income, sales, capital gains, real estate and sometimes even previous estate taxes on our homes, cars, farms, investments, collectibles and everything else we’ve built up over a lifetime. A tax that taxes stuff that’s already been taxed is just plain wrong.
Equally wrong is the penalty we pay for dying in Ohio. In the other 16 states that have estate taxes, the average size of an estate that can be passed on untaxed is six times bigger than what Ohioans can leave our kids. And we’re many times more likely to owe the state than we are to owe the feds. Is it any wonder lifelong Ohioans feel compelled to pack up their households and bank accounts and spend their final days in Florida?

Worse is that some Ohioans don’t even have that option. You can’t move a farm, or a corner store, small factory or any other community-based family business. Farmers and other entrepreneurs, hoping to build a better life for future generations (and keep providing jobs for the community), pour their earnings back into land, buildings and equipment. This often leaves insufficient cash to pay the death tax. Heirs are forced to sell all or part of their heritage to cover the state’s covetous tab. Where’s the fairness in a tax that takes a bite of a family’s legacy, repeatedly, each time a generation passes?

Admittedly, there’s a legitimate problem that would come with eliminating death taxes. About 2 percent of Ohio’s local governments, which rely heavily on estate tax collections, will feel some pain. I could argue that budgeting based on mortality tables isn’t sound governance. Nevertheless, we who want Ohio’s estate tax repealed are obliged to help local leaders find spending reforms, then support them when they make difficult choices.

I read once there are only two kinds of people who don’t like paying taxes. Men and women. But while we joke, and occasionally complain, we’re mostly OK with equitable costs attached to responsible government. But when a lifetime of paying taxes comes to an end, enough is enough. Fairness demands our legacy be handed down to our families, not handed over to the tax man.