NCBA LEADERS CALL FOR REPEAL OF FEDERAL ESTATE TAX

by: Kevin Kester
President-Elect, National Cattlemen's Beef Association


You cannot blame folks in Washington, D.C. for misconstruing how the U.S. Tax code impacts agricultural producers. With the number of Americans directly involved in agriculture at historic lows, the voices of farmers and ranchers are often missing in national tax policy debates. As Congress moves forward with overhauling the U.S. tax code this autumn, the National Cattlemen's Beef Association is determined to change that.

Through our Cattlemen for Tax Reform campaign, we are sharing the personal tax stories of U.S. beef producers and advocating for tax policies that support American cattlemen and women. Unfortunately, an opinion piece by Chris Collins ["Limos, Not Tractors," Sept. 22] recently took aim at the campaign, questioning its authenticity and disparaging our call for full repeal of the federal estate tax, also known as the death tax. Collins' piece sorely missed the mark in explaining the grave burden the death tax places on family-owned farming and ranching operations, but it did raise important questions: Who is driving Cattlemen for Tax Reform, and why do they want to see the death tax abolished?

Let's start with the who. Cattlemen for Tax Reform is fully financed and run by the National Cattlemen's Beef Association, the oldest and largest organization representing US. beef producers in the United States. With more than 25,000 members across the country, our ranches and operations are the bedrock of many rural communities. We are real ranchers, with real stories. And we know firsthand that the death tax harms our family businesses and drains our rural economies.

Collins' claim that ranchers and farmers are not impacted by the death tax could hardly be more out of touch. The only reason I did not lose my ranch is because my family and I struggled and scrimped for more than a decade to pay a staggering $2 million death tax bill. If Collins ever pays off a $2 million tax bill on the assessed value of the land he needs to do his job, I may take his opinion more seriously. In the meantime, he is just a guy safely ensconced in his air-conditioned, think-tank bubble, throwing stones at those of us who feed the world and pay millions of dollars in taxes.

In farming and ranching communities, the facts on the ground are clear: The death tax is a primary obstacle for keeping family- owned farms and ranches intact and viable. To understand why, consider that ranchers - like many agricultural producers - rely on a land-rich, cash-poor business model. According to the U.S. Department of Agriculture, 91 percent of all farm and ranch assets are illiquid, meaning they cannot be easily converted to cash. With few liquid assets, family ranchers facing the death tax are forced to sell land, farm equipment or other parts of the operation to raise money for the tax liability.

Under the current tax code, my family would be forced to sell off substantial parts of the ranch at the time of my death, making it highly unlikely for the next generation to survive on what remained. Suggestions that current death tax rates do not pose a threat to the continuation of family agricultural businesses are absolutely false.

Farmers and ranchers understand the role taxes play in maintaining and improving our nation. Like other business owners, we pay yearly taxes on our income and land. But the death tax allows the federal government to bill us twice for the same assets, and forces us to sell off parts of our family business in the process. Besides being patently unfair, such actions negatively impact long-term business success. One would be hard-pressed to think of any business that can afford to give away 40 percent of their base value every generation and survive.

A common refrain from death tax proponents is that very few people end up paying the tax. Yet those of us living with the specter of the death •tax know the final numbers belie the true costs. The full impact of the death tax is felt even by those who do not end up paying. Farmers, ranchers and rural economies suffer as precious resources are diverted from investment in businesses and employees to estate planning, accountants and legal fees.

Collins dismisses these costs as "inconveniences." If that's all they are, I want his salary. The ranchers I know must spend thousands or even hundreds of thousands of dollars on tax and estate planning. In many instances, they go so far as to restructure their businesses in ways that impede growth, just to avoid a costly tax bill. All the time and money spent navigating the death tax would be much better spent expanding businesses, hiring additional employees and spurring economic activity in rural communities.

They may be hidden from most Americans, but the impacts of the death tax on U.S. farmers and ranchers are real. The National Cattlemen's Beef Association will continue to stand up for family-owned farms and ranches - and rural communities - who have lived with the negative consequences of the death tax for far too long. If our elected officials are truly committed to supporting agricultural producers, Congress should act decisively to end this unfair burden once and for all.







Don't forget to BOOKMARK  
Cattle Today Online!