FB Lauds Senate Passage of Death Tax Elimination Bill

WASHINGTON, D.C., July 14, 2000 -- Senate passage today of legislation repealing the federal death tax by 2010 will not only help farm families across the country continue the businesses they have worked long and hard to build, but provide support for the rural communities that depend on these family-run businesses, according to the American Farm Bureau Federation.

"U.S. farming is dominated by family businesses," said AFBF President Bob Stallman. "The majority of a producer's assets are usually tied up in their land, equipment and buildings. When parents die, their daughters and sons are often forced to sell their farms piece by piece to pay huge government tax bills."

The bill, which passed the House last month, totally eliminates death taxes by 2010. At that time, $5.6 million of assets per family would retain stepped-up basis, which would protect families from high capital gains taxes if farms or ranches were sold. The Senate voted 59 to 39 in favor of the legislation which now goes to the White House.

Stallman urged President Clinton to sign the bill. The administration has issued veto threats, which Stallman called "unfortunate and unwise."

Stallman said rural communities have felt the pinch as the economic viability of family farms is put in jeopardy as growers struggle with low commodity prices and high regulatory costs, as well as large tax burdens.

"When farms and ranches have to be sold off to pay death taxes, the rural communities and businesses they support also are hurt," Stallman said. "Farmland near urban areas is often lost forever to development when farm families are forced to sell key aspects of their operation to pay the government."

Current estate tax rates vary from 37 to 55 percent. The legislation reduces all estate tax rates by about 15 percent over 10 years, until the tax is completely eliminated. The lowest rate cut would be from 37 percent to 18 percent immediately.

"Individuals, family partnerships or family corporations own 99 percent of the farms in this country," Stallman said. "Farm Bureau is very pleased that the Senate has completed action to effectively kill the death tax and help ensure U.S. farms remain in family hands."

This page was last modified Fri Jul 14, 2000 at 12:05 pm