Ag Groups Urge Congress to Reform Estate Tax
--U.S. farmers and ranchers will be hit with a 55 percent estate tax on Jan. 1, 2011
WASHINGTON – The National Cattlemen’s Beef Association(NCBA) hosted today, Nov. 30, 2010, a news conference to urge the 111th Congress to pass meaningful estate tax reform. On Jan. 1, 2011, the estate tax, commonly called the death tax, reverts back to its pre-2001 levels of 55 percent on farm estates worth $1 million. NCBA was joined by nine other agricultural organizations, representing a broad scope of the agricultural industry. Representing NCBA was Scott Bennett, a junior at Virginia Tech University and an active participant in his family’s cattle operation, Knoll Crest Farm, in Red House, Va. Bennett said he wants to return to his family’s operation but the estate tax is a burden that may make his goal impossible.
“One would think that commonsense would prevail and this death tax would be reformed in such a way that it allows young people, the next generation, to take over family farms and ranches, which are responsible for providing a safe, abundant and affordable food supply here and across our borders,” said Bennett. “But, here we are only a month away from a death sentence to family farmers and ranchers without any clue about what type of resolve, if any, will move through Congress.”
The estate tax disproportionately hits agriculture. Ninety-six percent of American farms and ranches are owned and operated by families, and the estate tax is considered one of the leading causes of the breakup of multigenerational family farms and ranches. Because farm and ranch assets consist mainly of land, buildings, and specialized equipment, these estates may look wealthy on paper, but they include few saleable assets and little liquidity to pay estate taxes.
“Knoll Crest Farm was started by my great-grandfather, passed on to grandfather, now 76 years young, and primarily operated by my dad and his two brothers. Knoll Crest Farm’s success has relied on risk taking, passion, innovation and blood, sweat and tears. My grandfather has attempted to plan around the uncertainty of this tax but this task is nearly impossible,” said Bennett. “With a $1 million exemption and a 55 percent tax, we would need to sell most of our assets just to keep part of the operation in the family. This is a death sentence to family farms, ranches and small businesses.”
The American Farm Bureau Federation; the American Soybean Association; the National Association of Wheat Growers; the National Corn Growers Association; the National Cotton Council; the National Farmers Union; the National Milk Producers Federation; the National Pork Producers Council; and the Public Lands Council all participated in the news conference.