Every year, huge tracts of America’s undeveloped landscape fall prey to a section of the federal estate tax—known to many as the “death tax”—which forces the sale and development of land just to pay the tax bill. Undeveloped land that has been in families for generations ends up on the chopping block of development when land is transferred from one generation to the next. Why? Because the Internal Revenue Code (IRC) indiscriminately applies a harsh valuation of land; even when a family plans to conserve undeveloped land for generations to come. At a time in our nation’s history when the preservation of hunting land should be ultimately encouraged, coerced development of such land is all too prevalent.
There are many factors driving the deforestation and development of land throughout America. Exploding population growth creates urban sprawl with millions of acres fields and trees converted to concrete each year. Population growth is a macro issue that is tough to combat, but there is one specific IRC provision that, if changed, would be an enormous step in the right direction: the valuation of a decedent’s land. There have been a few legislative attempts to address this provision, but they have not succeeded. A change to the valuation of a decedent’s land must be adopted soon to protect the vast quantities of hunting land that are being lost each year before it is too late.
Overall, the Congressional Budget Office estimates that estate tax has generated just 1-2 percent of federal revenues in most years during the past half-century. For 2012, the estate tax has a top tax rate of 35 percent with an exemption amount of approximately $5 million. In 2013, the top tax rate jumps to 55 percent and the exemption amount will fall to $1 million. Landowners have long been penalized under the estate tax, but they have suffered even more in recent times, with land values on the rise and the exemption amount in a state of flux.