It's also because an exception to inheritance tax that covers farm land and forests. Rich people have been buying up both (Dyson owns several counties now).
Literally yes - generational farms are expected to go out of business when the head of the family dies as a result, and have to sell up to massive farm businesses.
Excluding any type of income from taxation means every other type of income needs to be taxed at a higher rate, all to protect whatever is being carved out. Thus we tax income from investments, salaries, and yes inheritance.
Inheritance tax has positive externalities as inherited wealth discourages people from being productive members of society. Meanwhile taxing salaries discourages work, and taxing investments discourages savings.
> "Inheritance tax shouldn't be a thing in the first place."
The problem with entrenched intergenerational wealth is you eventually end up with a feudalistic society, with a small population of extremely wealthy families controlling all the capital but essentially just becoming rent-seekers, with no incentive or need to innovate in order to maintain their wealth (on the contrary, they will seek to suppress innovation and disruption in order to maintain the status quo). In the long run this leads to violent revolution or other forms of societal collapse.
Some states call it different things but most call it in "Current Use." [0]
If you want to take the land out of Current Use, you'll usually have to pay the back taxes first.
Around my parts, it's seen as a very good program as it promotes natural growth. It's also great for protecting wetlands that wouldn't be buildable anyways but can now be protected at a lower cost.
https://www.gov.uk/guidance/woodland-owners-tax-guidance
https://whoownsengland.org/2017/09/19/why-is-james-dyson-hoo...