We learned in those years that tax shelters change the rules of competition. Efficiency is not sufficient to survive in a tax shelter industry. The advantage goes to top bracket taxpayers with large incomes to shelter and capital to invest. Moderate-size and beginning farmers were placed at an unfair competitive disadvantage. We also learned that industries plagued by tax shelters are less profitable.
Tax shelters are magnets for investment.
As more dollars were invested in agriculture, meat and milk production increased and prices fell. Production costs were increased, as tax motivated investment drove the price of farmland well beyond its income earning potential. But not everyone was affected equally. History also cautions us to be wary of the growing clamor for repeal of the estate tax. Wealth tends to concentrate, absent countervailing measures.