The NCBA praises legislation introduced by Congressmen Mike Thompson (D-CA) and John Salazar (D-CO) that would provide farmers and ranchers relief from the death tax.
HR 3524, the Family Farm Preservation and Conservation Estate Tax Act, would exempt working farm and ranch land from the death tax, as long as the land is kept in production agriculture. Should the land be used or sold for other purposes, a recapture tax would be imposed.
“The death tax is one of the leading causes of the breakup of family farms, as producers are forced to sell their land to pay off taxes on their inheritance,” said Gary Voogt, NCBA President and rancher from Marne, Mich. “This legislation is an important step in ensuring hardworking farmers and ranchers can keep their land in their families.”
Currently, estates valued at more than $3.5 million, or $7 million for a couple, are taxed at a 45 percent rate. President Obama has proposed freezing it at this level so it can be dealt with at a later date. But if Congress doesn’t act to freeze or reduce the estate tax, in 2011, it will revert to a staggering 55 percent tax on estates worth only $1 million or more.
“Our country can’t afford the consequences of taxing our farmers and ranchers out of business,” Voogt said. “NCBA will continue to press for relief from the death tax, and we look forward to working with Congressmen Thompson and Salazar to ensure that cattle producers can continue to work their land and feed our nation.”
Repeal, or at least relief, from the death tax has been a high priority for ag groups for years, as burdensome taxes challenge land-rich but cash-poor farm and ranch families trying to pass the business to the next generation. Supporters of the tax, however, portray attempts to eliminate or reduce it as a “tax break for the rich.” The fact that two Democratic Congressmen are pushing for an ag exemption is significant, and could lead to permanent relief from this destructive tax. A Drovers article titled “A mixed blessing” outlines the status of the death tax and its impacts on agriculture and family businesses. — John Maday, Drovers managing editor