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U.S. CATTLE PRODUCERS SPEAK OUT: HEAR OUR VOICES!!

(Tuesday, April 25, 2006)

When all your assets are in land, livestock and equipment that allow you to grow the nation's food, your only choice is to sell them in order to pay off taxes assessed on land appraised considerably higher than its agricultural value. Below is just a sampling of voices from rural America:

Jim McAdams, Texas rancher:
“My family settled near Huntsville, Texas in the 1830's to farm and ranch. I still remember my father's struggle to pay off the Death Tax after my grandparents died. In fact, we were still paying off debt we had incurred because of this tax when I joined the family ranch after graduating from college. All I ever wanted to do was ranch but the operation couldn't support my parents, my own family and the Death Tax.
 
“Death should not be a taxable event. We must eliminate this tax to keep farming families producing our nation's food, not selling their land to developers.”

Jim Esill, Nevada Rancher:
“My dad died in 1997. He was a cattle rancher all of his life. My share of the estate included about 500 acres of grazing land in Fresno co. Calif.  My dad paid taxes on this land and his father before him paid taxes on it to.  The death tax on the place is around $230,000.  I have deferred payments of about $15,000 per yr. ($30.00 per acre) for 15 years.
 
“If I lease it for grazing I can get maybe $20.00 per acre. If I run my own cattle I might make $25.00 per acre (if it rains and the market holds) otherwise I may lose some.  But I still have to pay the death tax. Only on an exceptional year do I come close to breaking even. This place was bought and paid for years ago with the idea that it would produce income. Now, after 70 years in the family, it has become an economic liability.
 
“When you add to that the emotional feelings associated with ones heritage, death of a parent, and threat to a way of life, it’s almost unbearable. How did this happen?”
 
Jack Turnell, Wyoming rancher:
“My grandson is sixth generation on the ranch, going back to the 1800s.  Back in 1922, we almost lost the ranch because of the state taxes. Most of my neighbors, most Wyoming ranchers and their grandsons aren't going to be there someday just because of the death tax.  They won't...they won't be able to afford to keep the ranch unless they sell most of the ranch to pay the tax.  Then, there won't be much left, so... it's a huge problem within the industry.” 

“The death tax is just unfair. Our government never intended to tax people at 50% or more at death.  Most of our family has sold out.  So, to hang on to what we have is very important to me.  I want my grandkids to be able to work the land.  But I don’t know if it will happen. You have to have a lot of stamina to survive in ranching.”

Bill and Kathy Rhea, Nebraska ranchers:
“We need to get rid of the death tax.  We went through this in 1986 when my husband's mother died.  When my husband and I die, our son, who's involved with the operation, will have a very difficult time paying the taxes and maintaining the business at the level it is.  He would probably have to downgrade in size and lay off employees.” 

“I think the death tax is unfair because while we have assets, we don't have income necessarily commiserate with the assets we have, which a lot of people do not understand. We must get rid of the death tax.” 

Boyd Spratling, Nevada rancher:
“Ours is a family operation, with the fourth generation now at the ranch, and we're very concerned about the stability of agriculture.  One of the most important ways to stabilize family agriculture is to permanently repeal the death tax.  The tax is destructive for us because ranches and farms are very high capital intense operations.  We have a lot invested through generations of modest living.  We have a lot invested in our operation, our cattle, our land, our equipment.  We have very close margins that we live on.” 

“When we pass to the next generation, we're not talking about trust fund kids that have never been at the ranch.  We're passing operations to someone that has worked all their life on the land.  They may be in their 50s, 40 years old, having worked there and built that operation all their life.  Now those same people have to repurchase their own ranch from the government, and I just think that's the ultimate injustice.”

Bob & Kathy Lee, Montana ranchers:
“Countless people have suffered from the death tax, going further into debt, refinancing an operation.  That just takes the interest out of the next generation.  We need enthusiasm.  As you well know, any job worth doing, you have to do well.  And, we're limited by time, energy, and money.  After death, we have to go back and refinance the ranch, start paying for the whole thing over again.

“I urge for permanent repeal of the death tax.  And, if you go out in the country, even our friends in urban areas will realize that they need this open space more, and more, and more.  They need to have people on the ground, working that ground 24 hours a day, 7 days a week.  Not just for us, our families, and our wildlife, but for them also to come out and enjoy what we have to offer.” 

“The greatest renewable resource that we have is our ranch lands and our grass lands.  We do not take that lightly.  It's something we value and something we want to pass on to the next generation.”

Paxton Ramsey, Texas rancher:
“I am a fourth generation cattle producer from a 101-year-old ranch in Devers, Texas. I have two children that I am doing all I know to do to continue to improve and increase the value of this ranch for this up and coming fifth generation.

“My Grandmother has just turned 90 and is doing very well. However, if something happens to her, the taxes that the third, fourth, and fifth generation will endure will most likely force us to sell quite a bit of land in order to pay them off, leaving us with less land to operate.

“The less land we have to operate, the less beef we can provide this country and the less chance my children, and not to mention the children of thousands of other ranches and farms, will have to make an honest, productive living on our family operation. The Death Tax is destroying farmers’ and ranchers’ chances to continue to provide for their families and for this country in an already difficult industry.”

Maxine & Shorty Jones, South Dakota ranchers:
“We truly are sickened by the devastation of this law because we know there have been many, many families as devastated by dealing with the planning for our own, and paying off the estates of family members. When Shorty's mother died in1993 we had yet another Death Tax hit. We believe our family paid between $1.5 and $2.0 million in taxes on the four deaths between 1949 and 2002. Now if only the federal Death Tax would face the death it so 'richly' deserves!”

Mark Frasier, Colorado rancher:
“I am a family rancher from Fort Morgan, Colorado. Years ago, the tax was created to restrict the generational transfer of property, to prevent us from becoming a nation of feudal lords and serfs.  It served no purpose then and it remains pointless today.

“Effective life-long plans to deal with the Death Tax costs thousands of dollars, as ranchers contort the family business to remain under an arbitrary line.  Worse yet, those dollars are not available to hire new workers or reinvest and keep the ranch healthy and productive. 

“The risk is very real, since left unchecked, current law will expire in 5 years and leave even modest family farms and ranches exposed to tax rates as high as 55 percent. The needs of our government have traditionally been funded by taxes on productive assets and the gain they produce.  Why nominate a successful business person for a special contribution on the event of his or her death?  It's time for the Death Tax to die.”

More Personal Stories from Across the U.S.:

"Our family was first struck by the Death Tax back in the early 1970's when both my grandfather and uncle passed away within a short period of each other. We had to sell 1,200 acres of the ranch. Every penny went to pay the taxes assessed to us and we still had to take out a loan for a balance that wasn't covered. Not one cent was used for anything except taxes."
-Larry Barthle, along with brothers Mark and Randy, owns and operates Barthle Brothers Ranch of San Antonio, Fla. a multi-generational family cattle ranch.

"We had our first dealings with the death tax when my grandfather passed away in 1993. We were prepared - or so we thought. But, despite all our efforts we were assessed a death tax of $1.5 million. We had all our assets put in an irrevocable trust, which did keep us out of probate court, but it didn't alleviate us from one penny owed on our death tax."
-Kevin Kester is a fifth generation rancher and owner of Bear Valley Ranch in Parkfield, California.

"It's a matter of principal. Even if my families ranching operation wouldn't be affected by this tax I would still be in opposition to it. It is wrong and it places uncontrollable burdens on families who are simply trying to maintain the land and way of life which was passed down to them."
-Jim Alderman is a 3rd generation cow/calf producer and former Supreme Court Chief Justice from Okeechobee, Fla.

"The biggest expense for the ranch is the insurance policy I have to keep to help protect us from the death tax. The policy cost $48,000 annually and even with the whole ranch in operation we can only producer 400 calves a year.
With a good market on the calves a fourth of my gross income goes to pay the cost of the insurance the ranch could never sustain itself with that kind of burden."
-Pete Bonds is the owner of Bonds Ranch located within minutes of the Historic Fort Worth Stockyards which is the only open space remaining in the area.

"My husband’s family has been ranching on our land for generations. When his father passed away they thought they had everything in place to cover the death taxes. However, due to unforeseen consequences, the reality was just the opposite. The taxes wiped my mother-in-law out. She lost everything she owned in the process of trying to pay the taxes so she could keep the land and pass it on to her children. She had to sell everything later in life just to survive."
-Patsy Nathe & family operate a cattle ranch in Dade City, Fla.

"The sad reality is the displacement of so many families because of the death tax. The truth is that there is not enough estate planning out there to fully protect all families from this tax. If the farm can't be held together and pieces must be sold off to pay the tax then some family members are forced out because there is not enough room in the operation for everyone."
-John Gregg owns and operates a family feedlot and cow/calf operation in Esterville, Iowa.

"A family ranching operation can't generate enough cash in a lifetime to pay off inflated estate taxes. This tax creates for an extinction of the family ranch. If these families are not able to maintain the land it will all go into big money corporations and there will be no open spaces left in our country except those that are government owned."
-Fred Drummond is a multi-generational cattle producer from Pawhuska, Okla.

"When my Dad died suddenly in 1973 at the age of 56 he left behind a wife, three young children and a death tax of over $1 million to be paid within one year. We were forced to sell our dairy ranch outside of Tampa in order to keep the cattle ranch. This came after our case was tied up in probate court for 12 years, during which time we struggled just to pay the interest."
-Cary Lightsey owns and operates Lightsey Cattle Company along with his brother Lane in Lake Wales, Fla.

"At the current gifting level it would take 700 years to gift the entire estate to my son. Life insurance is an option, but a $1.5 million policy isn't practical given the payments I am currently making on the $92,000 tax owed after my parents passed away. Even if my son could arrange to pay a $2 million death tax bill over 10 years, he would still owe over $200,000 a year plus interest. A ranch like ours just does not generate that much cash flow. Our ranch is more than just a business or a home; it is a lifetime commitment by past, present and future generations. We have worked hard on this ranch, and at some point we'd like to be able to do more than buy fence posts and insurance policies. This is my reality, but it could become my son's nightmare if the death tax is not eliminated.”
-K.L. Bliss is a cattle producer from Sand Springs, Mont. where his family has ranched since the early 1900's.

"I started 25 years ago making plans for the impact of the death tax on my families farming operation. At that time it cost me $30,000 to get my estate plan in place. Every year I gift as much allowed by the government to my children to help alleviate the pressures of the tax, but it is not enough. My children will still be assessed at large tax upon my death, which will create a burden in trying to maintain our family farm."
-Matt Toebben is the owner of Triple T Angus in northern Kentucky.