President's Budget Threatens to Tax Agriculture Out of Business
NCBA calls estate tax counterproductive to Obama's stated goals.
President Barack Obama Feb. 13, 2012, proposed a multi-trillion-dollar-budget. The president said the budget is designed to spur job creation and impose higher taxes on the rich. However, National Cattlemen's Beef Association (NCBA) President J.D. Alexander said the president's take on the estate tax threatens job creation and punishes the producers of food and fiber.
"President Obama has much to learn about the realities of small businesses and production agriculture. Most of these farm and ranch families are not wealthy. Instead, their value is tied up in the land they work and the equipment they use to provide a safe and affordable food supply for a growing population," said Alexander. "The President's war against the rich will negatively impact farmers and ranchers who are simply trying to feed their neighbors. Increasing land values and the rising costs of equipment drive up the value of farm and ranch estates. If allowed to continue, the estate tax will continue to break up farms and ranches across America and will make it much more difficult to meet the increasing demand for food around the world."
The president's budget proposes an estate tax at a $3.5 million exemption level with a maximum tax rate of 45%. As a result of a last-minute fix passed through Congress in December 2010, the current estate tax exemption level is $5 million per individual and $10 million per couple with a maximum tax rate of 35%. Alexander said the president's proposed fix is not a solution but rather a continuation of unnecessary and outdated tax burdens on farmers and ranchers.
"Farmers and ranchers are asset-rich and cash-poor. Land and machinery does not equate to cash unless it is sold. When families are forced to sell off property to pay for the estate tax, the land seldom remains in production," he said. "This outdated tax is escalating the depopulation of rural America."
Alexander said people need to be aware that Obama's budget is only a suggestion and the actual budget will be determined by Congress.
"The details are in Congress. We will be engaging members of Congress over the next several months to ensure a permanent fix to the estate tax is achieved," Alexander said.
The estate tax was a large part of the discussion at the 2012 Cattle Industry Convention in Nashville, Tenn., Feb. 1-4. Visit the newsroom at www.4cattlemen.com for Angus Productions Inc.'s coverage of the event to learn more.
— Adapted from release in NCBA's Newsletter
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