American Farm Bureau Federation President Bob Stallman is asking for permanent repeal of the estate tax, saying that farmers and ranchers are particularly hard hit by the so-called death tax. Stallman spoke at a press conference on Capitol Hill with Reps. Kenny Hulshof (R-Mo.) and Robert Cramer (D-Ala.), co-sponsors of bipartisan legislation that would make death tax repeal permanent.
“Death taxes are a deadly thorn in the side of farmers and ranchers,” said Stallman. “This unfair tax can force the liquidation of farms that have been in families for generations. Farm families can be put out of work, farmland can be lost to development and businesses in rural communities can be damaged.”
Unlike non-farm estates, farm and ranch estates face heavier, potentially more disruptive death tax burdens. Roughly twice the number of farm estates paid federal death taxes in the late l990s compared to estates in general. The average farm death tax is larger than the tax paid by most other estates, Stallman said.
“Farmers pay more because they use more assets in their operations,” said Stallman, citing land appreciation, larger farms and more mechanization, which have increased the worth of the average farm operation. “This means that farmers and ranchers typically have larger estates, not because they are rich, but because their businesses are capital intensive. That translates into a big enough tax bill to put many farm businesses at risk.
Permanent repeal is the only way to end the problems that death taxes cause farmers and ranchers,” said Stallman. “The uncertainty of current law, with its temporary repeal, makes estate tax planning more complicated and costly and sometimes nearly impossible.”
Current law phases down the death tax through 2009 and eliminates it completely in 2010. However, sunset language in the measure provides for the reinstatement of the death tax in 2011.
“Passing the Hulshof-Cramer legislation to make death tax repeal permanent will not only help farmers and ranchers after 2009 but will make it easier for them to cope between now and then,” said Stallman.