Senator John Thune, R-S.D., has introduced the Death Tax Repeal Permanency Act, S. 2242, which would permanently abolish the federal estate tax. The Senate bill is identical to H.R. 1259 introduced in the House by Representative Kevin Brady, R-Texas. The tax is currently set at a 35% tax rate with a $5 million exemption. However, in 2013, the estate tax rate is scheduled to increase to 55% with a $1 million exemption. However, in 2013, the estate tax rate is scheduled to increase to 55% with a $1 million exemption.
National Cattlemen's Beef Association President J.D. Alexander calls the tax an unnecessary tax on small businesses and farm and ranch families across the country.
"The death tax is detrimental to the farmers and ranchers who live off the land and run asset-rich, cash poor family-owned small businesses," Alexander said. "Our priority is to keep families in agriculture and this tax works against that goal."
The appraised value of rural land is extremely inflated when compared to its agricultural value. Many cattle producers are forced to spend an enormous amount of money on attorneys or sell off land or parts of the operation to pay off tax liabilities. This takes more open space out of agriculture and usually puts it into the hands of urban developers.
Thune, calls the estate tax destructive, misguided, and inefficient, and he says the economy, small businesses, family farms, and ranches that are expected to be transferred to future generations will benefit enormously from its elimination. Co-sponsor, Senator Mike Johanns, R-Neb., points out that the loss of a family member should not be a taxable event, and Americans should not be forced to sell the family business, farm or ranch just to pay it.
According to a study by Douglas Holtz-Eakin, the former director of the non-partisan Congressional Budget Office, repealing the death tax could create 1.5 million additional small business jobs and decrease the national unemployment rate by nearly 1%.