These days it seems like a point of agreement between Republicans and Democrats in Congress is about as common as a five-legged jackalope. Fortunately though, on some issues affecting farmers and ranchers, at least some of our esteemed congresspersons from both sides of the aisle manage to see eye-to-eye.
This week’s example is an issue near, if not dear, to the hearts of agricultural producers – the estate tax. Thursday afternoon, U.S. Representatives Kevin Brady (R-Texas), Mike Ross (D-Ark.) and Devin Nunes (R-Calif.) joined in a telephone news conference on the filing of the bi-partisan Death Tax Repeal Act – H.R. 1259 – with Reps. Kristi Noem (R-S.D.) and Dan Boren (D-Okla.), that would permanently repeal the estate tax, commonly known as the death tax.
We’ve written numerous articles on this issue, outlining how the death tax can place such a heavy burden on family farms and ranches, where most of the business’ assets are tied up in land and equipment. For some of the Nation’s wealthy, whose assets consist primarily of cash, equities or other liquid investments, paying the tax might mean Junior has to drive a Mercedes instead of a Bentley. But for farm and ranch families it can mean the end of the business. With little cash relative to the farm’s value, heirs sometimes need to sell part or all of the operation just to pay the tax, taking land, and the next generation, out of agricultural production.
This tax, says Representative Brady, is the number-one reason family farms and other small businesses are not passed down to the next generation, and small businesses, he adds, account for 68 percent of new-job growth in the United States.
Representative Ross says that in his district, containing 21,000 square miles in Arkansas, crops and cattle are a way of life. Small businesses account for half and agriculture about one sixth of all jobs in Arkansas.
Currently, the tax affects estates worth $5 million or more, after the last-minute 2010 extension of Bush-era tax cuts. Without that extension, the exemption would have been reduced to $1 million with a maximum tax rate of 55 percent. The extension is good for two years, but beyond that, it’s anyone’s guess which direction estate taxes will go.
Ross points out that in his state, a row-crop farmer with 2,000 acres of land easily has assets worth more than $5 million in land alone, and he says concern over estate taxes is a common sentiment among Arkansas farmers and ranchers.
Brady believes the bill stands a good chance of passage in the House of Representatives, but “is going to be a fight” in the Senate. He expresses some concern that the issue might lack a sense of urgency in the Capital due to the tax-cut extension, but believes now is the time to eliminate the tax altogether.
So, it’s good to see at least some bi-partisan cooperation on this issue, and this just might be the time to settle it once and for all. NCBA strongly supports this legislation, and other ag groups likely will express their support soon. If you believe the death tax could damage your business, or your neighbors’ businesses, contact your Congressional representatives and ask them to support H.R. 1259.