Ranchers' Personal Perspectives on Death Tax
WASHINGTON - Members of the National Cattlemen’s Beef Association (NCBA) are urging members of the U.S. Senate to pass full and final repeal of the Death Tax this spring.
“NCBA’s ‘Cattle Call to Kill the Death Tax’ on Capitol Hill today is giving farmers and ranchers a chance to unite and speak out about personal experiences with the Death Tax,” says Jay Truitt, NCBA vice president of government affairs. “To understand the direct and devastating impact this tax has on agriculture, just check out the following stories from some of America’s most impacted ranchers.”
Jim Estill, Nevada and California rancher:
“My dad died in 1997. He was a cattle rancher all of his life and had left 500 acres of grazing land. My dad paid taxes on this land, and his father before him paid taxes on it too. The Death Tax on the place when he died was around $230,000. I have deferred payments of about $15,000 per year ($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 after that, I still have to pay the Death Tax, and my heirs will be forced to pay it again someday.
“Only in 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 emotions associated with ones heritage, the death of a parent, and a threat to my way of life, it’s almost unbearable. How did this happen?”
Robert Farnam of Etna, California:
“We have now lost over 5,000 acres due to the Death Tax. My family was born, raised and died on this ranch for six generations. This heritage was ruined due to the Death Tax and losing over half of our ranch. The ranch is now only large enough to sustain one family, and so my parents run the ranch and the rest of us have no connection to the ranch that has been in our family for six generations. When my parents pass away, we will likely have to sell the remaining acreage to pay for the estate tax, because the land values for development are skyrocketing and there will be no way to pay the burdensome Death Tax.
“The Death Tax is an unfair tax on the working middle class of America. The wealthy are already protected through high-dollar financial managers and through tax loopholes that we cannot afford to create on our own. We are asset rich and very, very cash poor.
“This tax has also ruined some of the most pristine wildlife areas in the country, because ranchers have no other choice than to sell some of their land. Farm and ranch land that is sold is usually developed into homes or commercial buildings. Our land was very productive and included a major wildlife corridor for elk and deer to move from the high country to the low country, but now the only things that migrate down it are gas consuming cars. Losing this ranch and family business has torn my family apart and has left scars etched on our souls.”
Bill and Kathy Rhea of Arlington, Nebraska:
“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 downsize and lay off employees.
“I think the Death Tax is unfair because while we have assets, we don't have income necessarily commensurate with the assets we have, which a lot of people do not understand. We must get rid of the Death Tax.”
Ralph (“Shorty”) and Maxine Jones of Midland, South Dakota:
“Shorty's older brother Tom, who died three years ago, had to sell his cows, lease his land, and go into trucking due in large part to estate taxes we all had to pay when his father died. We truly are sickened by the devastation of this law because we know there have been many, many families just as devastated by dealing with the planning for their own estates as have been devastated by paying off the estates of family members.
“When Shorty's mother died in 1993, we had yet another Death Tax hit. On four deaths between 1949 and 2002, our family paid between $1.5 and $2 million in taxes and planning to reduce the tax burden. Now, if only the federal Death Tax would face the death it so richly deserves!”
Chris Christensen of Hinsdale, Montana:
“In 1971, my grandfather Ray died. The ranch was solely in his name, and my mother had to pay a Death Tax. A year later, my grandmother Emma passed away. The ranch was passed down to my dad, who had to once again pay a Death Tax on the same land. Then, in 1978, his father was diagnosed with cancer, and he passed away two months after the diagnosis. The ranch was left to my mom Donna, me - I was 14 at the time- and my younger brother. We once again had to pay the tax on the same land.
“At this point, we almost lost the ranch. We had to re-mortgage multiple times and had to sell cattle. Today, we are still in debt. Each time we thought we were done paying the interest rates and loans and would finally be able to profit and grow again, something else would happen… I have been trying to tell the story of this crippling tax on U.S. ranchers for almost my entire life.”
Jack Turnell of Meeteetse, Wyoming:
“My grandson is sixth generation on the ranch, going back to the 1800s. Back in 1922, we almost lost the ranch because of the estate taxes. Most of my neighbors, most Wyoming ranchers and their grandchildren 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 to support the next generation. So... it's a huge problem for our industry.
“The Death Tax is just unfair. Our government never intended to tax people at a rate of 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.”
Mark Frasier, Colorado rancher:
“The risk is very real, since left unchecked, current law will expire 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.
Larry Barthle of San Antonio, Florida:
"Our family was first struck by the Death Tax back in the early 1970s 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."
Dale Anderson of Larkspur, Colorado:
“In an effort to pay the Death Tax, so much money was spent that the operational needs could not be met for years, causing a large-scale sell off of hay and cattle. This, in turn, caused such a downward spiral the place had to be sold to relieve the debt.
“Many people spend all their lives in an effort to build a ranch for future generations. Once they pass on, then our government expects the next generation farmer/rancher to repurchase the same property they have worked on for maybe fifty years when a parent dies. This is not affordable to most without acquiring a new massive debt, causing the place to be lost.”
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 highly capital-intensive 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 well into their 40s or 50s, 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.”
Cary Lightsey of Lake Wales, Florida:
"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 operation 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."
Any U.S. Senator can be reached via the Capitol Hill switchboard at (202) 224-3121, or visit http://capwiz.com/beefusa/ to send letters directly to your Senators.