TAX BILL SAVES BEEF PRODUCERS THOUSANDS

WASHINGTON, D.C., (August 12, 1997) -- The tax reform bill
passed by Congress and signed by the President will save
thousands of dollars for family farmers and ranchers, according
to the National Cattlemen's Beef Association.  The reform bill
contains substantial reductions in capital gains and death taxes
paid by farmers and ranchers.
    
     "For many beef producers, the death tax, or estate tax, is
the difference between being able to pass the farm or ranch on to
the next generation, or having to break up the operation just to
pay the huge estate tax bill," said Max Deets, Beloit, Kan.,
president of NCBA.  "Under the recently signed bill, death taxes
can be reduced by hundreds of thousands of dollars for many
family operations," he said.
    
     Under the new law, the current $600,000 unified credit
exemption will be phased up to $1 million by the year 2006 for
all estates.  In addition to the increased unified credit, family
farms and ranches can utilize a new family business exclusion.
Effective in 1998, family businesses will have a combined unified
credit and exclusion of $1.3 million per entity, which would
change slightly each year due to the interplay between the
unified credit and the family business exclusion.  This change
alone would save a $3 million estate $358,783 in taxes in 1998
(see example).
    
                        Death Tax Example
                   (based on a single person)
                               
        Total taxable value of estate in 1998  $3,000,000

        Old Law--tax due                       $1,098,000

        New Law--tax due                         $739,217

          Difference                             $358,783
         
     The top rate for capital gains will drop to 20 percent for
investments held at least 18 months.  For individuals in the
lower income bracket, the top rate will be 10 percent for 18-
month assets.  These changes could save $20 to $32 per head in
capital gains tax (see example).
    
                      Capital Gains Example
                               
     This example, pending adoption of final administrative
rules, illustrates the savings on selling 20 bred heifers and
assumes heifer prices are $900/head with $500/head expenses at a
zero basis creating a total taxable gains income of $8,000.
    
      Upper Bracket -- Old Law      28 percent   $2,240 tax due

                       New Law      20 percent   $1,600 tax due

                       Difference--$640 savings or $32 per head

     Bottom Bracket -- Old Law     15 percent   $1,200 tax due

                       New Law     10 percent   $  800 tax due

                       Difference--$400 savings or $20 per head
     
     The bill also includes income averaging until Jan. 1, 2001;
increase of the deduction of health insurance to 100 percent by
early next century; elimination of the Alternative Minimum Tax
for small business and favorable tax treatment of livestock sold
because of adverse weather conditions.
    
     "The tax reform bill is a great win for beef producing
farmers and ranchers," said Deets.  "It's a powerful reminder of
the impact grassroots producers can have when they work together
on an important issue," Deets concluded.
    
     Initiated in 1898, the National Cattlemen's Beef Association
is the marketing organization and trade association for America's
one million cattle farmers and ranchers.  With offices in Denver,
Chicago and Washington D.C., NCBA is a consumer-focused, producer-
directed organization representing the largest segment of the
nation's food and fiber industry.
    
                           -- NCBA --