Permanent Death Tax Repeal Critical for U.S. Cattle Producers

Death Taxes are one of the leading causes of the breakup of multi-generation family beef enterprises.

• Nearly one-half of the 250,000 cattlemen and women NCBA represents 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.
• 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.

The Death Tax is an unfair tax on American values and the American dream. The death of a family member should not be a heyday for the IRS.

• Recent surveys show that 78% of all Americans believe the Death Tax is an unfair tax.
• Among cattlemen recently surveyed, 88% say that the fear of Death Taxes has changed the way they invest in their own business.
• 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.
• This is not a tax on the wealthy elite in America. It’s a death warrant for small-to-medium sized family businesses. 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.

The current temporary repeal was a step forward. But unless we’re planning on dying in 2010— its impossible for our small businesses to avoid this huge burden at the time of death.

• Because of the so-called “sunset provision” in the law, the death tax will be fully repealed only in 2010.
• The temporary nature of the Death Tax repeal provisions creates numerous problems for family farms, ranches and businesses. The uncertainty surrounding ultimate repeal will require business owners to continue with estate-planning strategies that are costly, cumbersome and time consuming.
• If Congress were to permanently repeal the Death Tax, these estate-planning resources would be reinvested directly into these businesses, thus creating new job opportunities and providing a much-needed boost to local economies.

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.

• Farm and ranch families are paying huge taxes for their ranches two and three times over, while at the same time paying taxes on the income used in their operations.
• Permanent repeal of the death tax is critically important to the future of America’s family businesses, farms and ranches, and the people they employ.

U.S. cattle producers URGE members of the Senate to pass full, permanent repeal of the Death Tax in 2006!!