House Tackles Death Tax, Senate Strays
- Leaders Looking for Permanent Estate Tax Relief
DENVER – National Cattlemen’s Beef Association (NCBA) Associate Director of Legislative Affairs Kent Bacus offered attendees of the 2012 Cattle Industry Summer Conference an update on recent movements in Washington, D.C., regarding the estate tax. This issue, according to Bacus, is the number one priority for NCBA, which is the oldest and largest national organization representing cattlemen and women. The issue rises to the top policy issue for family-owned small businesses, such as farms and ranches, because of the burden it places on families hoping to pass their business on to the next generation.
“The estate tax is a prime example of bad tax policy and Congress should repeal. Unfortunately, we hear from some elected leaders who claim to be defenders of the little guy. Meanwhile, they avoid opportunities to kill the death tax,” said Bacus. “In order to sustain these family businesses, the future must contain a level of certainty. The next generation cannot possible afford to take over the family business if they are taxed to death.”
Bacus gave some good news to cattlemen seeking permanent relief from the estate tax. Bacus reported that Congressman Kevin Brady (R-Texas) has 218 cosponsors on his Death Tax Repeal Permanency Act. This legislation would essentially provide full and permanent relief from the tax. Senator John Thune of South Dakota also introduced a companion bill - the Death Tax Repeal Permanency Act of 2012 - in his chamber and that bill has 37 co-sponsors. They also released an updated study proving how harmful and ineffective the death tax is from the Joint Economic Committee. Bacus said the study’s key points are the estate tax continues to hurt the economy, fails as a revenue generator, creates a barrier to economic equality and could increase revenue if it were abolished.
The bad news conveyed at the conference was the recent action taken by the Senate. The Senate voted on two tax packages this week that will be used for messaging purposes this election season. Senate Majority Leader Harry Reid (D-Nev.) led efforts to secure passage of a tax package that extends tax rates for family income up to $250,000 for a year, raises the top rate on capital gains and dividends, as well as continue several targeted tax provisions. The Reid package, according to Bacus, does not address the estate tax and would leave small business owners and ranchers vulnerable to a reversion of the pre-2001 levels of a 55 percent tax on estates worth $1 million or more. Bacus said this is unacceptable.
“Most farmers and ranchers would trip the $1 million threshold on land values alone. Land values are through the roof and all of the assets it takes to operate a farm or ranch, including livestock, farm machinery and more, would hit the majority of farm and ranch families throughout the country,” said Bacus. “This is not a tax on the wealthy. We must find permanent relief or risk taking land out of production agriculture, threatening our ability to provide food for U.S. consumers and abroad.”
Bacus said NCBA supports Rep. Brady and Sen. Thune in their quest to abolish the tax. Given the current political environment, however; NCBA would also support making the current tax levels of 35 percent on farms and ranchers valued at $10 million per couple. Bacus said this tax level, which is set to expire on Dec. 31, 2012, misses the majority of farmers and ranchers.