Cattlemen Applaud House Vote to Repeal Death Tax
Contact: Dale Moore   202-347-0228
June 9, 2000

The U.S. House 279-136 passed significant tax relief measures today that would help families pass their cattle ranches from one generation to the next by reducing and eventually repealing the unfair and overly burdensome death tax.

The strong bi-partisan vote in favor of the Death Tax Elimination Act (HR 8) marks the third time that the 106^{th Congress has passed some measure of tax relief. HR 8 would reduce estate taxes in 2003, and by 2010 the measure would fully repeal death and gift taxes.}

“The vote clearly indicates that Congress understands the excessive burden estate taxes often place on family ranchers and other small businesses,” said Stan Melroe, a cattle producer from Gwinner, ND, and chairman of NCBA Tax and Credit Committee. “Death should not be a taxable event. We commend the sponsors of this legislation and all who voted in favor for realizing how important death tax repeal is to the survival of family ranches.”

NCBA co-directs the 10-year-old Family Business Estate Tax Coalition, a rapidly growing 137-member group representing various business sectors. The group has actively worked to bring public awareness to the plight family farmers and other small business owners often face when a family member dies.

“Passing your family enterprise from one generation to the next should not be as cumbersome as current tax laws now make it,” Melroe said. “Careful estate planning means spending a substantial amount on accountants and lawyers. Even with this, however, the heirs of an estate can face difficultly meeting federal tax obligations.”

Ranching operations are the backbones of some rural communities. Besides providing a living for the landowner, the operation is often the financial support for family members and others who work the ranch.

Estate tax obligations sometimes force ranching families to sell assets that are critical to the economic viability of their operation, such as cattle, land and equipment. This effectively reduces the size of their ranch or puts them out of business.

Death taxes can also force a reduction in open space and wildlife habit when ranches are sold to developers. Sportsmen’s groups also have been working with NCBA to urge repeal of the death tax.

A 1997 study by Kennesaw State University explored this difficulty and concluded that family businesses often face heavy estate tax burdens because much of their capital is concentrated in the business. For cattle producers, the impact is even greater because the majority of assets include land and other tools necessary to manage an operation, the study found.

“A prudent rancher can effectively manage his business, but when the day is done, market fluctuations, the weather and taxes are key players in a rancher’s ability to financially survive,” said George Hall, a cattle producer from Oklahoma, and NCBA president. “Ranchers and farmers are the people who feed this country. If Congress and the president can do something to keep more land functioning as ranches, then by all means they should.”

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