Congressmen Mike Thompson (D-Calif.) and John Salazar (D-Colo.) have introduced legislation that would provide farmers and ranchers relief from the death tax.
House Bill HR 3524, also called the Family Farm Preservation and Conservation Estate Tax Act, would exempt working farm and ranch land from the death tax, as long as the land is kept in production agriculture. Should the land be used or sold for other purposes, a recapture tax would be imposed.
“The death tax is one of the leading causes of breaking up family farms, as producers are forced to sell their land to pay off taxes on their inheritance,” said Gary Voogt, National Cattlemen's Beef Association president and rancher from Marne, Mich. “This legislation is an important step in ensuring hardworking farmers and ranchers can keep their land in their families.”
Currently, estates valued at more than $3.5 million, or $7 million for a couple, are taxed at a 45 percent rate. President Obama has proposed freezing it at this level so it can be dealt with at a later date. But if Congress doesn’t act to freeze or reduce the estate tax, in 2011, it will revert to a staggering 55 percent tax on estates worth only $1 million or more.
“Our country can’t afford the consequences of taxing our farmers and ranchers out of business,” Voogt said.