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Tax & Credit Committee
Addresses Estate Tax

by Troy Smith for Angus Productions Inc.

NASHVILLE, Tenn. (Feb. 3, 2012) — According to its chairman, Nebraska cattleman Dave McCracken, the work of the Tax & Credit Committee seems pretty dull to many National Cattlemen’s Beef Association (NCBA) members. However, its work affects all cattle producers. The Nebraska cattleman offered that reminder as the Committee met during the 2012 Cattle Industry Convention in Nashville, Tenn.

 

McCracken also reminded attendees that eliminating a threat to farm and ranch succession — the so-called "Death Tax" — is an NCBA task for which the Committee plays a leading role.

 

“The association has been and still is working for 100% elimination of federal estate taxes for farmers and ranchers,” said McCracken. “That’s NBCA policy developed in this committee.”

 

The meeting agenda included a report from Kent Bacus, associate director of legislative affairs in NCBA’s Washington, D.C., office. According to Bacus, members of Congress are plenty interested in taxes. For them, it’s a “hot-button issue.”

 

Bacus noted President Obama’s proposal for reducing the federal deficit through tax increases for wealthy Americans whose incomes exceed $1 million. NBCA is concerned that more than “wages” would be counted as taxable income, including capital gains and dividends. As such, explained Bacus, the proposal could mean big tax increases for small businesses, including agricultural operations.

 

However, Bacus said the Death Tax may be the most burdensome to multi-generational family farms and ranches, threatening the ability of heirs to keep intact the assets necessary to a viable agricultural operation. According to Bacus, at least 29 pieces of legislation addressing estate taxes have already been proposed by House and Senate members. Looking for “the devil in the details,” Bacus said NCBA staff and leadership will study all proposed legislation related to this issue. However, he expects little meaningful activity in Congress until election year campaigning ceases and voting is over.

 

“I’m very skeptical about the chances for any movement on tax issues until November,” stated Bacus. “It could make for a very large tax package to deal with at the end of the year.”

 

The only bright spot is that, meanwhile, NCBA has time to prepare a solid argument, including information to share with lawmakers about actual families that have experienced the effects of the Death Tax. Bacus asked for help in identifying people willing to tell about their eperiences.

 

The only new policy action during the meeting was advancement of a resolution seeking change to the Internal Revenue Service tax code. The resolution calls for changes in IRS rules to allow costs of replacing fences destroyed by natural disaster to be expensed and deducted in the same year the costs were incurred.

 

Also on committee agenda was attorney Allie Devine, who shared tips for avoiding “pitfalls” associated with dealer or broker contracts and other livestock transactions. Devine’s advice came as part of an NCBA education response to Eastern Livestock and MF Global bankruptcies. Devine advised producers to become familiar with the Uniform Commercial Code, which serves as law for business transactions and sales.