WASHINGTON – Many beef industry leaders and workers are relieved the US Senate voted earlier today to extend all expiring tax rates for two years, including National Cattlemen’s Beef Association President Steve Foglesong The Senate-passed bill would reduce the top rate of the estate tax, commonly known as the death tax, to 35%; increase the exemption level to $5 million; index exemptions to inflation; and include a stepped-up basis.
Foglesong said NCBA has been at the forefront of estate tax reform because of the devastating impact it has on America’s farm and ranch families.
“The estate tax is a government approved, signed, sealed and delivered ticking time bomb for US farmers, ranchers and small business owners,” said Foglesong, who is in Washington, D.C. this week addressing critical issues affecting US cattlemen and women. “This is an outdated tax that is inaccurately framed as a tax on the rich. The US Department of Agriculture even names the death tax as one of the top contributors to the breakup of multigenerational farming and ranching operations. The Senate’s vote to extend the current tax rates and bring the estate tax down to more reasonable levels offers a great deal of relief to US cattlemen and women right before the New Year.”
On Jan. 1, 2011, the tax would have escalated to pre-2001 levels at 55% and an exemption level of $1 million. This would have caused many family-owned operations to sell off portions or all of their assets to pay for the tax, according to Foglesong. For example, Scott Bennett, junior at Virginia Tech University and an active participant in his family’s Virginia cattle operation, Knoll Crest Farm, said the uncertainty of the death tax has made it nearly impossible for his grandfather to make plans for their farm’s future.
“With a $1 million exemption and a 55% tax, we would need to sell most of our assets just to keep part of the operation in the family,” Bennett said. “This would be a death sentence to family farms, ranches and small businesses. Thank goodness the Senate passed some relief for family farms and ranches like Knoll Crest Farm. Now, I just hope the House follows suit and passes the Senate’s bill.”
The Senate passed the amendment with an 81-19 vote. It will now move to the House for consideration before being sent to President Obama to be signed into law. Foglesong said the “ball is in their court” referring to the House. He said a “speedy” vote is necessary to prevent an undeserved death sentence to many family-owned farms and ranches.