ISSUES POLICY
Death Tax Adversely Affects Domestic Economy
By Robert McKnight, second vice president, Texas and Southwestern Cattle Raisers Association
T
HE FEDERAL ESTATE TAX, ALSO KNOWN AS THE DEATH TAX, makes many ranchers, agricultural producers and landowners cringe. As a seventh-generation
rancher who has dealt with this onerous tax, I under- stand how diffi cult it can be, especially while coping with the loss of a loved one. Ranchers aren’t the only ones adversely impacted
by the death tax. It creates a ripple effect that causes the domestic economy to suffer. According to the USDA, agriculture is responsible
for 1 out of 7 jobs in Texas and 1 out of every 12 jobs in the country. Each time a rancher or farmer is forced out of business to comply with the death tax, jobs are lost and the monetary output of the agricultural industry is negatively impacted, causing a major gut-punch to the entire economy. Some see the death tax as a minor inconvenience
for the wealthy, but this is simply not the truth. Many ranching and farming families are asset-rich and cash- poor. Most of their estate is attributed to the value of the land they own and use to raise cattle and grow food and fi ber for millions worldwide. The monetary value of a rancher’s property can easily trigger the estate tax. This is before including the worth of the other equipment and infrastructure on the property. If Uncle Sam comes knocking on the door and de-
mands millions in taxes, many have no other choice than to sell off assets to come up with the cash. Piece by piece, their family’s culture and heritage are sold
80 The Cattleman July 2015
off to pay the unreasonable tax bill. This forces ranch- ers to lay off skilled employees, leaving them jobless and costing the federal government more in reduced economic growth than was generated in tax revenues. The middle class takes one of the hardest hits from
the estate tax. A study by the Joint Economic Commit- tee reports that the estate tax hurts economic growth by discouraging savings and small business growth. Many communities rely on their local farmers and ranchers to keep small businesses, such as feed stores, grocery stores and restaurants, etc., operating. When a ranching or farming operation goes under due to the estate tax, every economic sector of a community can be harmed. We need to think about the next generation. Our
country will rely on Millennials to continue building the economy. Many young folks are hesitant to inherit the family ranch and a hefty estate tax. Texas and Southwestern Cattle Raisers Association
(TSCRA) continues to fi ght for a repeal of this unfair tax. Until the death tax is fully and fi nally repealed, TSCRA will support legislation to keep in place the levels set in 2012 by the Affordable Tax Relief Act — $5 million per individual or $10 million per couple, with a top tax rate of 40 percent. We appreciate Reps. Kevin Brady (TX-08) and Mac
Thornberry (TX-13) for their efforts in the U.S. House of Representatives to repeal the death tax, and we encour- age more members of Congress to follow their lead.
thecattlemanmagazine.com
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