NCBA urges Senate to keep repeal provision in FY 05 budget resolution

Washington, D.C. (March 9, 2004) – The National Cattlemen’s Beef Association (NCBA), representing generations of rural families across the nation, is commending U.S. Senator Don Nickles (Okla.) for including a provision in the Senate 2005 budget that would accelerate the full repeal of the death tax to 2009.

“I want my grandchildren to have the opportunity to continue working this ranch for generations," says Kansas cattle producer and NCBA President Jan Lyons. "Hundreds of thousands of rural families are living of the land, working hard to maintain ranches built by their forefathers. The excessive burden of 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, the appraised value of rural land is extremely inflated from the agricultural value over the years. 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, into the hands of urban developers.

“We must fight for permanent repeal of this antiquated tax,” says Jay Truitt, NCBA’s executive director of legislative affairs. “The temporary provisions of the death tax repeal complicate an already overly complex and burdensome tax. This uncertainty requires business owners to continue costly, cumbersome and time consuming estate planning. Each year that death taxes are repealed reduces this burden.”

The FY 05 budget language would repeal the tax in 2009 and 2010, and help to create a legislative framework for permanent repeal of the death tax in the future. 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. Members of the NCBA are dedicated to fighting for permanent repeal. The Senate is likely to consider debate for several days on the budget.

“This is clearly not a tax on the wealthy elite-- it’s a death warrant for small-to-medium sized family businesses,” explains Truitt. "The rich can afford accountants and estate planners to help them evade the tax. They’re cash-rich and amass fortunes, place the money within foundations, and are able to easily survive this tax burden.”

This week, as the Senate votes on the FY 2005 budget resolution, NCBA members are urging Senators not to water down or strike language that would accelerate death tax repeal, and to keep the death tax repeal provision in the budget. NCBA strongly supports passage of funding for death tax elimination in the FY 05 budget.

The National Cattlemen’s Beef Association (NCBA) is the largest organization representing America’s cattle industry. Initiated in 1898, NCBA is the industry leader in education, influencing public policy to improve producer profitability and in preserving the industry’s heritage and future. Efforts are made possible through membership contributions. To join, contact NCBA at 1-866-BEEF-USA or membership@beef.org.