The most crippling issue for agriculture at the moment, in my opinion, is the death tax. It is single-handedly sending more farms and ranches to market and is one of the most highlighted reasons the “next generation” isn’t able to stay in agriculture. Even in situations where the next generation tries to purchase the operation, current collateral needs, interest rates and financing options all but shut the door on the idea. In my travels, inheritance and succession planning seems to be the most talked about issue in agriculture.
Once again, the movement is happening to target the federal estate tax, but the landscape in DC looks much more different than it ever has, so I remain hopeful!
On Feb. 13, Senate Majority Leader John Thune (R-SD), Sen. Mike Crapo (R-ID) and Sen. Chuck Grassley (R-IA) were three of 45 senators who introduced a bill that would ultimately repeal the federal estate tax.
“Family farms and ranches play a vital role in our economy and are the lifeblood of rural communities in South Dakota. Losing even one of them to the death tax is one too many. It’s time to put an end to this punishing, burdensome tax once and for all so that family farms, ranches and small businesses can grow and thrive without costly estate planning or massive tax burdens that can threaten their viability,” Thune said at the introduction of the bill.
Crapo added, “Small businesses are the lifeblood of Idaho’s economy, and family farmers, ranchers and entrepreneurs have often worked lifetimes to grow their businesses. The death tax can be a devastating blow to American families who want to pass down their farm or small business to the next generation. It’s time to permanently provide relief from this unfair tax.”
Grassley summarized his thoughts by saying a lifetime of work should not slap the next generation with an unaffordable burden upon the passing of a loved one. He called the measure outdated and said more needs to be done to help family farms keep their money to create opportunities in rural communities.
In a letter gaining support for S.587, the Death Tax Repeal Act, Kelsey Snider, the principal of federal government relations for the National Federation of Independent Business explains, “For small business owners, the death tax is an unnecessary burden that is triggered when assets are passed onto children or family members … it is the leading cause of dissolution for thousands of family-run businesses. In many cases these small family run businesses are bought up by larger businesses that don’t have the same community presence as the small business.”
Companion legislation was also introduced in the House of Representatives by Rep. Randy Feenstra (R-IA-04). I feel if there is going to be any success, the current landscape has as much promise since I’ve been in this profession. Simply put, the conservative majority across all forms of government is poised to make a strong push to reestablish an ag-friendly atmosphere.
I also take into consideration the newly formed Department of Government Efficiency. Yes, I admit, this department is much of the theatrics and headlines being pushed out there, but we have to appreciate the simple fact that the government spending and waste that most assumed was happening is being exposed. Even if nothing comes of it, the cover is blown and taxpayers want accountability. It’s the core reason why this administration is sitting in the offices they are. If the stars are going to align for producers on this issue, today looks as good as ever.
Now, what needs to happen from our standpoint is that all of agriculture has an opportunity to work together and share a win. In addition, there are numerous other organizations from restaurant associations, home builder associations, worker representation organizations and so on, who represent family businesses and agree this tax needs to go. There’s unassumingly the strongest position agriculture has had in DC for quite some time. In speaking of my own family’s operation, I frankly don’t care what industry organization claims victory, I just want the victory.
My family’s operation and footprint in southeast Idaho dates back to the late 1800s. I would be the sixth generation if I were there. Under current regulation, enough acreage would need to be sold that it would be a stretch to think that even one family could be supported. A repeal of the death tax would give my family a fighting chance to pass on the operation. We are among the thousands of livestock producers feeling the same way.
As the Death Tax Repeal Act makes its way through political channels in Washington, farmers, ranchers and like-minded family businesses should take this opportunity to share their views— make a phone call, write a letter or send an email. Tell your elected officials in DC what this means to your family. Your kids and grandkids deserve it. — LOGAN IPSEN
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