U.S. Senator Tommy Tuberville joined Sen. John Thune in reintroducing legislation to abolish the federal Estate Tax and cut red tape that is imposing increased restrictions on working families. The two senators previously introduced this legislation in 2021.
“The Death Tax destroys American jobs by stifling profitable businesses that employ hardworking Americans,” said Sen. Tuberville. “Our government should be focused on creating an economic environment that preserves small businesses and family farms instead of taxing them out of operation. I will keep pushing for policies that incentivize our next generation of farmers and business owners so that we can continue to rely on their contributions for a strong economy.”
“Agriculture is the backbone of South Dakota’s economy,” said Thune. “For years, I have fought to protect farm and ranch families from the onerous and unfair death tax. Family-owned farms and ranches often bear the brunt of this tax, which makes it difficult and costly to pass these businesses down to future generations. I will continue to do everything in my power to remove these roadblocks for family businesses and repeal the death tax once and for all.”
“For far too long, the death tax has wreaked havoc on farm families and small businesses across Kentucky,” said Senate Minority Leader Mitch McConnell. “The burden of this unfair and punitive tax can be devastating for families who only want to pass down their hard-earned livelihoods to the next generation. Washington Democrats need to recognize the economic damage they’ve inflicted and join Republicans in ending this harmful tax. I0000’m proud to stand with Senator Thune for repealing the death tax for good. Kentuckians must be allowed to build upon the legacies of their family farms without fear of financial ruin.”
Alabama Farmers Federation President Jimmy Parnell also supports the legislation.
“Farming is a capital-intensive business with many of the assets such as land and equipment tied to the operation of the farm,” Parnell explained. “Without cash on hand, a family could be forced to sell these assets just to pay the tax burden, jeopardizing the viability of the farm. We need tax policies that encourage profitability of current farmers and the next generation of farmers, and repealing the estate tax is a huge step in the right direction.”
Todd Wilkinson is the President of the National Cattlemen’s Beef Association.
“No cattle producer should ever be forced to sell their family’s farm or ranch to pay a tax bill due to the death of a family member,” said Wilkinson. “Repealing the death tax is a commonsense way to keep the farm or ranch in the family. As a land-based, capital-intensive industry, most cattle-producing families are asset-rich and cash-poor, with few options to pay off tax liabilities. It is unacceptable that some families are forced to sell off land, farm equipment, parts of the operation, or the entire ranch to pay the estate tax. We need a tax code that promotes the continuation of family-owned businesses instead of breaking them up.”
American Farm Bureau explained on their website, “Almost all farmers and ranchers have benefited greatly from congressional action that increased the estate tax exemption to $11 million per person/ $22 million per couple (indexed for inflation), provided portability between spouses, and continued the stepped-up basis. Instead of being burdened with the cost of life insurance and estate planning, farmers are able to upgrade buildings and purchase equipment and livestock to help improve their small business. And more importantly, they have been able to continue farming when a family member dies without having to sell land, livestock, or equipment to pay the tax.”
“While the new higher exemption levels set by the Tax Cut and Jobs Act protect the vast majority of our nation’s farms and ranches from the devastating consequences of estate taxes, the exemption levels expire after 2025 when they will return to $5.5 million per person/$11 million per couple. Farm Bureau supports making the Tax Cuts and Jobs Act estate exemption permanent as a step toward permanent repeal.”
Farming is capital intensive without being consistently highly profitable compared to other investments. A modest two-thousand-acre farm that was worth $360 an acre in 1983 could be worth $5000 per acre in 2023 valuations – and considerably more in places like Baldwin, Madison, Limestone, or Shelby Counties, where urban sprawl has raised the value of the land – even if the profitability of the farm has not increased. Even the values of the farmhouses, barns, tractors, trucks, and even the cows in the field are included in the IRS’s assessment of the value of the farmer’s estate. A cow grazing out in a cow pasture could have a tax value of $1,500 today versus $350 for her great-grandmother 30 years ago – and the great-grandmother been more profitable given today’s considerably higher input costs for feed, hay, seed, and fertilizer.
Alabama’s junior Senator, Katie Britt, is also a cosponsor of this legislation.
Tuberville said that he is committed to strengthening rural and farming communities. As 55 of Alabama’s 67 counties are classified as rural, Tuberville has spoken about the importance of preserving family farms in Senate AG hearings and has shared his concerns about how proposed tax hikes would impact family farms with U.S. Agriculture Secretary Tom Vilsack.