The American Farm Bureau Federation supports legislation introduced Wednesday (June 19) in both the House and Senate that would permanently repeal the estate tax.
Sen. John Thune’s (R-S.D.) bill, The Death Tax Repeal Act of 2013, coupled with bipartisan legislation of the same title introduced by Reps. Kevin Brady (R-Texas) and Mike McIntyre (D-N.C.), is welcomed by America’s farm and ranch families.
While significant tax relief was enacted last year to help farmers cope with estate taxes, AFBF believes permanent repeal is still the best solution to protect all farms and ranches. The legislation introduced Wednesday would repeal the estate tax, maintain stepped-up basis and make permanent a 35 percent maximum gift tax rate and $5 million lifetime gift tax exemption indexed for inflation.
“Individuals, family partnerships and family corporations own 98 percent of our nation’s 2 million farms and ranches,” said AFBF President Bob Stallman.
“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. This not only can cripple a farm or ranch operation, but also hurts the rural communities and businesses that agriculture supports.”
The value of family-owned farms and ranches is usually tied to illiquid assets, such as land, buildings and equipment, said AFBF. With 85 percent of farm and ranch assets illiquid, producers have few options when it comes to generating cash to pay the estate tax.
Recent increases in agriculture cropland values, on average 15 percent from 2011 to 2012, have greatly expanded the number of farms and ranches that now top the estate tax exemption.
“Farm Bureau believes the estate tax should be eliminated permanently,” concluded Stallman. “We fully support The Death Tax Repeal Act of 2013 to get the job done.”
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