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Cattle producers want certainty in the tax code

The National Cattlemen’s Beef Association wants a federal estate tax code that promotes the continuation of family-owned businesses and protects America’s farmers and ranchers.  Kent Bacus, NCBA executive director, government affairs, says the current relief is set to expire in 2025. “When we have increasing land prices and we’ve got all of these other things that are pushing up values of those assets that we have, we have to be really careful that we have a tax code that doesn’t hurt a lot of our producers,” he says. 

He tells Brownfield part of the challenge is making sure members of Congress are informed. “If you look back at 2017, the last time any of this stuff was addressed, about half of the House of Representatives wasn’t here, and probably about a third to a half of the Senate wasn’t here either,” he says.  “So you’ve got all of these people who are new to this and don’t really have a lot of experience dealing with these issues.”

Bacus says there isn’t an issue that will go away anytime soon. “We don’t need to continue to encourage bad spending,” he says.  “We need to encourage responsible government. We do that by having a tax code that actually works for farmers and ranchers.” 

NCBA supports bipartisan legislation recently introduced in the U.S. House by Congressmen Jimmy Panetta (CA) and Mike Kelly (PA).  The bill would expand IRS Code Section 2032A to allow cattle producers to take advantage of the Special Use Valuation and protect family-owned businesses from the Death Tax.

Some additional background:   While the current 2032A reduction is 55 percent higher than the value established two decades ago, USDA estimates that cropland values have increased by 223 percent. Agricultural land values – including on-farm buildings – have also risen dramatically, increasing by 241 percent during this same period. Due to the rapid inflation of farmland values, the 2032A deduction is no longer aligned with the needs of modern agriculture – nor does it accomplish Congress’ intended goal of providing meaningful protection to those producers who are most vulnerable to the estate tax.

Brownfield interviewed Bacus at NCBA’s 2023 Summer Business Meeting in San Diego.

AUDIO: Kent Bacus, NCBA