Death Tax Repeal Critical to Livelihood of U.S. Cattle Families

NCBA urges House support for permanent repeal legislation

The National Cattlemen's Beef Association (NCBA), representing generations of ranching families across the nation, strongly supports the new Hulshof-Cramer Death Tax Repeal Permanency Act of 2005. The legislation is being introduced today in the U.S. House of Representatives by Rep. Kenny Hulshof (R-Mo.) and Rep. Robert E. "Bud" Cramer (D-Ala.).

"The excessive burden of the Death Tax has had major ramifications for my own family business and is devastating to U.S. farmers and ranchers," says Texas cattle producer and NCBA President Jim McAdams.  "Hundreds of thousands of rural families are living off the land, working hard to maintain ranches built by their forefathers. The Death Tax hits with a devastating blow of up to 55 percent in taxes on the entire operation when a family member dies. It is an unfair tax on American values and the American dream."

In an asset-rich and cash-poor business like ranching, the appraised value of rural land is extremely inflated when compared to its agricultural value. Many cattle producers are forced to sell off land, parts of the operation, or the entire ranch to pay off tax liabilities.  This takes more open spaces out of agriculture production, usually into the hands of urban developers.  Currently, a 10-year phase-out to full repeal by 2010 is scheduled. But the tax will be re-instated in 2011 (back to 2001 levels) unless Congress approves legislation making the repeal permanent.

"The death of a family member should not be a heyday for the IRS," explains Jay Truitt, NCBA's vice president of government affairs. "We have farm and ranch families that are paying for their ranches two and three times, all while paying taxes on the income used in their operations. The current temporary repeal was a step forward. But unless you're planning on dying in 2010- the time is now to pass the Hulshof-Cramer bill and finally bring about the death of the Death Tax."

"This is not a tax on the wealthy elite in America. It's a death warrant for small-to-medium sized family businesses," explains McAdams.  "The cash-rich can afford accountants and estate planners to help them evade the tax. They amass fortunes and place the money in foundations.  Unlike us, their financial worth does not rest on the value of equipment and land."

With 97 percent of American farms and ranches owned and operated by families, the elimination of the Death Tax represents an important step in stimulating the nation's economy.  The U.S. cattle industry is comprised of more than 1 million individual farms and ranches and represents the largest sector of American agriculture.  NCBA will continue to fight for permanent repeal, and urge House members to support the Hulshof-Cramer Death Tax Repeal Permanency Act of 2005.