Ag groups support Death Tax Repeal Act

U.S. Reps. Randy Feenstra (R-IA) and Sanford Bishop (D-GA) introduced legislation on Jan. 18 to repeal taxes on the transfer of property from a deceased family member to their heirs, commonly called estate tax but also known as the death tax.

The Death Tax Repeal Act, introduced in March 2023 by U.S. Sens. John Kennedy (R-LA) and John Thune (R-SD) would permanently repeal the death tax, an unfair and costly tax on the transfer of property, land and other assets from a deceased family member to heirs of family farms and small businesses.

According to Feenstra’s office, the Death Tax Repeal Act was supported by 162 other members of Congress and 194 organizations across the country. 

“I’m proud to lead 162 of my colleagues to permanently repeal the death tax, ensure hardworking families, farmers and small businesses keep more of their hard-earned money and strengthen family owned and operated enterprises,” Feenstra says. 

Feenstra’s website notes, “Over 99 percent of the two million farms and ranches and over 95 percent of our nation’s small businesses in the U.S. are owned and operated by individuals and families, and this legislation would enable these multi-generational businesses to continue to support their families without having to pay a devastating tax upon the death of a family member.”

Repeal is a top priority 

Current death tax relief is set to expire in 2025, and national ag associations are urging Congress to act swiftly to provide lasting relief.

The National Cattlemen’s Beef Association (NCBA), the American Farm Bureau Federation (AFBF) and several other agriculture organizations applaud U.S. representatives for introducing the Death Tax Repeal Act.

“It is unconscionable for cattle producers to face a tax which forces them to sell all or part of their family’s farm or ranch due to the death of a family member. With the cost of farmland rapidly rising, the death tax presents a significant threat to the future of family farms and ranches,” states NCBA President Todd Wilkinson on the organization’s website.

He continues, “Most cattle producers have significant assets but are cash poor and operate on thin margins, leaving them with few options when they are saddled with an unexpected tax liability.”

Many producers have to sell off assets, including land, livestock, farm equipment or even their home, creating an incredible loss, which starts a vicious cycle and leaves future generations to face taxes which have been paid multiple times. 

“Rural America needs a tax code which promotes multi-generational, family-owned businesses instead of chopping them up,” Wilkinson concludes.

During a December 2023 AFBF Newsline podcast, AFBF Director of Government Affairs Dustin Sherer discusses a letter sent to Congress from AFBF, who has been a long outspoken opponent of the death tax.

Sherer states, “AFBF has long been opposed to any type of estate tax, and this particular bill would take the estate tax completely off the books.”

“It’s very indicative of how important it is too small, privately-held, family-owned businesses, farms and ranches,” he continues. “For some reason, at some point in history, somebody thought dying was a good enough reason to levy a tax on all of the assets they had accumulated, and we have always been philosophically opposed to it.”

This specific tax makes it difficult to transition a business from one generation to the next in many cases, and often, all producers want to do is keep their business within their family.

Local support

According to a press release from U.S. Sen. John Barrasso (R-WY) in April 2023, “Many family-run farms, ranches and small businesses across Wyoming are passed on from generation to generation.”

“Too many families have to make the tragic decision to give up generations of hard work just to pay the death tax,” says Barrasso. “I am proud to join the effort to protect our hardworking farmers, ranchers and business owners in Wyoming from this burdensome and unfair tax.”

U.S. Sen. Cynthia Lummis (R-WY) was also quoted in the press release, stating, “The last thing a family needs when a loved one passes away is a hefty tax bill from the federal government.”

She continues, “Wyoming ranchers are disproportionately impacted by this tax, and it makes it harder to pass down the legacy of family ranching to future generations. In order to protect the Wyoming way of life, we need to eliminate this burdensome and unfair tax.”

If the federal estate tax exemption reverts to pre-2017 limits, coupled with the rapid inflation of farmland values, many more families will be subject to the death tax.

Melissa Anderson is the editor of the Wyoming Livestock Roundup. Send comments on this article to roundup@wylr.net.