How the fiscal cliff impacts estate taxes

(CBS News) NAPA VALLEY, Calif. - Income taxes won't be the only taxes going up if there's no agreement on the fiscal cliff. Estate taxes -- paid by those who inherit property -- will also jump. We look at how this could affect some families.

Jeff Page owns a 120-acre vineyard in California's Napa Valley. But when his great grandfather started farming here in the late 1800s, this was cattle country.

"Both sides of the family came in before the turn of the century and farmed orchard fruit and cattle," said Page.

What falling off the "fiscal cliff" means for you

But much of the land he grew up on is gone -- sold to pay estate taxes after his grandfather's death.

Page's grandfather died in 1972 when estate taxes were at an all-time high -- 77 percent.

"It was a big tax bill," said Page. "It was half a million dollars. We sold off 150 acres. It gave us something to pay the tax with."

Now Jeff and his wife Mary worry their dream of passing the land on to their two daughters will be ruined by the fiscal cliff. The estate tax rate would rise from 35 percent to 55 percent on estates worth over $1 million. At today's prices in the Napa Valley, the Pages' land could easily be worth $8 million.

Mentioned that he was wealthy, Page answered: "Right. But it's all in the dirt. You know, we're dirt rich, cash poor."

For the Pages more than money is at stake. They want the land that is part of their family's past to also be part of its future.

  • John Blackstone

    From his base in San Francisco, CBS News correspondent John Blackstone covers breaking stories throughout the West. That often means he is on the scene of wildfires, earthquakes, floods, hurricanes and rumbling volcanoes. He also reports on the high-tech industry in Silicon Valley and on social and economic trends that frequently begin in the West.