Sen. Frank Pecora and Rep. Michael C. Gruitza HARRISBURG (Dauphin Co.) It has been said that there are only two things that are certain in life - death and taxes. Yet, while there may be no escaping the anguish of either, shouldn’t the surviving spouse of a family farm at least be spared the agony of having to cope with both at the same time? Some 47 states and the federal government have voted to scrap the tax on transfers at death from one spouse to another. However, three states, including Pennsylva nia, still cling to the so-called “widow’s tax.” In fact, Pennsylva nia’s death tax on transfers to spouses, now pegged at 6 percent, is the most severe tax of its kind levied by any jurisdiction - state or federal - in the country. Furth ermore, it is imposed on all estates. For example, a typical estate of $lOO,OOO transferred to a surviving spouse will pay a tax of $6,000. In an effort to bring Pennsylva nia’s inheritance tax in line with the rest of the country, bills were introduced last year and again this year in the State Legislature to amend the tax by excluding trans fers to a surviving spouse. One bill. House Bill 921, was passed unaminously by the House Finance Committee and is pre sently before the House Appropri ations Committee. An identical bill, Senate Bill 1444, has been introduced in the Senate and is awaiting a May 1 hearing before the Senate Finance Committee. Both bills are the result of a recommendation by the Joint State Government Commission, a bibartisan agency of Pennsylva nia’s General Assembly, to abol ish the “widow’s tax.” Though the health of the state’s farm community has improved in recent years, farmers still face low profit margins and encroachment by suburban developers. The pre sent “widow’s tax,” extracts a heavy toll on the continued opera tion of a farm, and inevitably con tributes to the further loss of agri cultural land in the state. Often, a death tax of this nature requires, in effect, that,the surviv ing spouse “buy back” the farm from the state. The spouse may have to borrow funds or sell part or all of the farm assets just to raise the cash needed to meet the “widow’s tax” obligation. Joint ownership of a farm exempts a farm family from the tax, but this is not always possible or desirable from a traditional point of view. For example, in farm communi ties, a farm and farm equipment STORAGE TRAILERS For Rent ,★ Delivered To Your Location ★ Safe And Inexpensive Storage KEENS SERVICES INC. 717-626-5420 850 Keens Road, LHltz, PA 17543 State’s Widow’s Tax Outlined are often passed from one parent to a child, with the spouse receiv ing a life interest in trust. The farm, farm equipment and live stock also may be titled in one per son’s name to expedite financing, even when the farm itself is titled in joint ownership. Thus, while the surviving spouse may inherit the farm tax free, he or she still may be required to pay the 6 percent trans fer tax on the animals and equip ment needed to operate the farm. Yet, the farm is never really changing ownership for economic consideration, and, therefore, remains in the same economic unit. To make matters worse, when the surviving spouse dies, the second estate will also be tax ed, resulting in double taxation of the family farm. Passing the proposed legisla tion will remove a harsh financial burden from the shoulder of sur viving spouses in farm families whose estates are, for the most part, tied up in non-liquid assets. Pennsylvania should not force these individuals to deplete their resources, or in the worst case, sell their farms just to pay the state’s inheritance tax. To the contrary, the state should do all in its power to encourage surviving spouses to remain economically viable. Apart from economic consider ations, the proposed amendment to the state inheritance tax can be justified on humanitarian and moral grounds. The death of a spouse is one of the most painful experiences one can face in life. It is a time to grieve, to reach out for spiritual and emotional support and uplifting. It is hardly the time to be burdened by major financial considerations, particularly an unwanted and perhaps crushing tax bill. Then, too, there is the question of how husband and wife should be treated for inheritance tax pur poses. The present death tax on surviving spouses runs contrary to the universally accepted principle that a husband and wife are one economic unit. For years, the fed eral government has viewed hus band and wife as a single econom ic unit for income tax purposes. The same concept is followed for federal estate and gift taxes. And in Pennsylvania, neither the Real ty Transfer Tax nor the Sales and Use Tax is imposed on a gratuit ous transfer from one spouse to another. Furthermore, the state’s new Divorce Code treats most assets as marital property to which both partners have some claim regardless how the title is held. All of these statutes reflect the under lying judgment that husband and wife form a partnership and that it is inappropriate to levy a tax on MMERMAN SB. I f 11 ' * 125 King Court/Hollander Rd. • New Holland, PA 17557 ZIMMERMAN RUGGED HEAVY DUTY WAGON GEAR All Prices FOB Factory Tires Extra MODELS 6 $450 $550 $775 INOCULANTS THAT WORK! 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A death tax has sometimes been justified on the basis that it restricts the perpetuation of wealth from one generation to another. Yet, the “widow’s tax on transfers of property between spouses has no relevance to the stated objective. Frank Pecora, a State Senator representing Allegheny and Kutztown, PA LEON WESSNER 215-285-6246 Lebanon, PA CLARENCE MULL 717-865-2037 Manheim & Lititz, PA NEVIN KEGERREIS 717-626-5469 Mifflintown, PA* DAVID SANER 717-535-5103 District Sales Manager - RON DODDS - 717-629-9352 RD 1 Box 432, Kunkletown, PA 180S8 Westmoreland counties, Michael C. Gruitza, a S Representative from Mer County, are principal spons of bills that would amend state’s inheritance tax exclude all transfers to a sun ing spouse. America’s down to earth seed company Myerstown, PA Bangor, PA JOHN S. AUKER GILBERT PYSHER 717-933-5224 215-588-8721 Oxford, PA* Kunkletown, PA BEVERLY MAST JEFF BORGER 215-932-4296 215-381-3785 Richfield, PA* SAM KNOUSE Mercer. 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