Legislation to Repeal Estate Tax Re-Introduced

Legislators say bill allows farms to pass through generations

Published on: Jun 20, 2013

Sen. John Thune, R-S.D., and Rep. Kevin Brady, R-Texas, Wednesday introduced the Death Tax Repeal Act of 2013 in the Senate and the House, respectively.

Thune and Brady’s bill is nearly identical to legislation introduced in the 112th Congress that received the bipartisan support of 223 Representatives and 38 Senators.

The bill would eliminate the estate tax, which the National Cattlemen's Beef Association says is "one of the leading causes of the breakup of multi-generation family farms and ranches."

As it currently stands, the estate tax exemption level remains at $5 million, $10 million per couple. The top tax rate on the value of the estate over the exemption level increased from 35% to 40% as part of the "fiscal cliff" negotiations which took place at the beginning of 2013.

Legislators say bill repealing the estate tax allows farms to pass through generations
Legislators say bill repealing the estate tax allows farms to pass through generations

During a press conference, Thune and Brady were joined by several other legislators and Steve Fogelsong, an Astoria, Ill., rancher and past NCBA president.

Fogelsong said many farm and ranch families are asset-rich and cash-poor, with most of the value of their estate attributed to the value of the land they use to grow food and fiber for consumers around the world.

"America's farm and ranch families should not be forced to sell off land, farm equipment, parts of the operation or the entire ranch to pay off tax liabilities and attorney fees," Fogelsong said.

Also supporting the legislation, American Farm Bureau Federation President Bob Stallman explained that individuals, family partnerships and family corporations own 98% of the nation's 2 million farms and ranches.

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"When estate taxes on an agricultural business exceed cash and other liquid assets, surviving family partners may be forced to sell land, buildings or equipment needed to keep their businesses running," he said. "This not only can cripple a farm or ranch operation, but also hurts the rural communities and businesses that agriculture supports."

AFBF said 85% of farm assets are illiquid, causing producers to have few options in coming up with enough cash to pay estate taxes.

Both the NCBA and AFBF also said that recent increases in agriculture cropland values, on average 15% from 2011 to 2012, have greatly expanded the number of farms and ranches that now top the estate tax exemption.

Thune, Chairman of the Senate Republican Conference and member of the Senate Finance Committee, said more than 70% of family businesses do not survive to the second generation, and 90% of family businesses do not survive to the third generation.

Thune’s bill is cosponsored in the Senate by Sens. Kelly Ayotte, R-N.H.; John Barrasso, R-Wyo.; Roy Blunt, R-Mo.; John Boozman, R-Ark.; Saxby Chambliss, R-Ga.; Dan Coats, R-Ind.;  John Cornyn, R-Texas; Mike Crapo, R-Idaho; Mike Enzi, R-Wyo.; Deb Fischer, R-Neb.; Jeff Flake, R-Ariz.; Chuck Grassley, R-Iowa; Orrin Hatch, R-Utah; Dean Heller, R-Nev.; Jim Inhofe, R-Okla.; Johnny Isakson, R-Ga.; Mike Johanns, R-Neb.; Mark Kirk, R-Ill.; Mike Lee, R-Utah; Mitch McConnell, R-Ky.; Jerry Moran, R-Kan.; Jim Risch, R-Idaho; Pat Roberts, R-Kan.; Marco Rubio, R-Fla.; Tim Scott, R-S.C.; Richard Shelby, R-Ala.; Pat Toomey, R-Pa.; and David Vitter, R-La.).

Brady’s bill is cosponsored in the House of Representatives by Reps. John Duncan, Jr., R-Tenn.; Jim Gerlach, R-Pa.; Tim Griffin, R-Ark.; Bill Johnson, R-Ohio; Sam Johnson, R-Texas; Kenny Marchant, R-Texas; Mike McIntyre, D-N.C.; David McKinley, R-W.Va.; Kristi Noem, R-S.D.; Devin Nunes, R-Calif.; and Austin Scott, R-Ga.