NCBA VICE PRESIDENT DELIVERS DEATH TAX BILL TO WHITE HOUSE

Lynn Cornwell Rides to Old Executive Office Building on Tractor to 
Highlight Effect Death Taxes Have on Family Ranches

WASHINGTON D.C. (Aug. 24, 2000) -- Highlighting the impact estate taxes have on cattle ranchers and other family business owners, NCBA president-elect Lynn Cornwell rode a tractor to help deliver the official version of the Death Tax bill to the White House for the president’s consideration.

Cornwell was present at an official ceremony on Capitol Hill. He was hand picked to ride with the official clerk to show how important this legislation is to ranchers, farmers and other family businesses.

"This bill is not only important to cattle producers, but it’s important for all family farms and small businesses in all sectors of the U.S. economy," Cornwell said. "Such taxes take away incentives to grow your business, and it affects your ability to pass your family ranch to the next generation. By passing this bill, Congress has sent a message that it understands the impact. We’d like to see the president sign this bill into law."

Cattle producers have rallied behind legislation to eliminate death taxes, which often cost families more than 50 percent of their net worth. NCBA on Aug. 15 sent a letter to President Clinton urging him to sign the legislation. Both houses of Congress passed the bill with strong bipartisan support.

Estate taxes are one of the leading causes of the breakup of multi-generation family beef businesses. Half of NCBA members operate businesses that have been in their families for more than 50 years and 15 percent operate enterprises that have been in their families for more than 100 years.

"While most cattle producers want to pass their life's work on to the next generation, the number of cattle operations has declined 20 percent in the past 20 years," Cornwell said.

Part of this is because of the costly estate tax burden, Cornwell added.

"The death tax bill has been described as something for only the wealthy," Cornwell said. "But it doesn’t take a very big operation to have assets totaling $1 million."

The cattle business is capital intensive. For example, the average 500-head cattle ranch has a net worth of $1.8 million and carries a death tax liability of $450,000. But such an operation only generates an annual income of about $50,000.

"A family who owns this size cattle ranch and is faced with the death tax would be forced to sell part, if not all, of their business because it would take all of nine years income to pay the estate tax," Cornwell said. "There’s an inherent unfairness and flaw in a law that would place this kind of burden on a family."

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Producer-directed and consumer-focused, the National Cattlemen's Beef Association is the  trade association of America’s cattle farmers and ranchers, and the marketing organization for the largest segment of the nation’s food and fiber industry.