As congressional lawmakers turn their attention to taxes, farmers and ranchers are urging them to include estate tax repeal in any tax reform legislation they consider this year.
“The estate tax is especially damaging to agriculture because we are a land-based, capital-intensive industry with few options for paying estate taxes when they come due. Unfortunately, all too often at the time of death, farming and ranching families are forced to sell off land, farm equipment, parts of the operation or take out loans to pay off tax liabilities and attorney’s fees,” 32 agriculture organizations, including the American Farm Bureau Federation, wrote to House Ways and Means Committee Chairman Kevin Brady (R-Texas) and Ranking Member Richard Neal (D-Mass.).
The groups also asked lawmakers to ensure the benefits of estate tax repeal are not eroded by the elimination of or restrictions to the use of the stepped-up basis.
The American Taxpayer Relief Act of 2012 permanently extended the estate tax exemption level to $5 million per person/$10 million per couple indexed for inflation, and maintained stepped-up basis, but the current economy, combined with the uncertain nature of agricultural production has left many farmers and ranchers guessing about their ability to plan for estate tax liabilities and unable to make prudent business decisions, the letter noted.
“Until the estate tax is fully repealed it will continue to threaten the economic viability of family farms and ranches, as well as the rural communities and businesses that agriculture supports,” the groups wrote.
Emphasizing that the most effective tax code is a fair one, the organizations asked that “any tax reform legislation considered in Congress [strengthens] the business climate for farm and ranch families while ensuring agricultural businesses can be passed to future generations.”