Texas cattlemen call on Congress to work together before tax cuts expire
For Immediate Release
Nov. 10, 2010
Contact: Carmen Fenton
FORT WORTH, Texas – As Congress prepares to head back to Washington, one thing is on the minds of Texas cattlemen – the urgent need for estate tax reform. Without reform by the end of the year, estate tax rates will rise to 55 percent on estates worth just $1 million.
“A million dollars sounds like a lot of money, but when you are talking about ranchers, very few of us are millionaires. While most ranching assets have increased in value, margins in the ranching business are thin and cash isn’t readily handy,” said Dave Scott, rancher and president of the Texas and Southwestern Cattle Raisers Association (TSCRA).
“If Uncle Sam comes knocking on my door and demands millions in taxes, I have no choice but to sell off my family’s assets to come up with the cash. Piece by piece, my family’s culture and heritage is sold off to pay the tax bill,” he continued.
According to the National Cattlemen’s Beef Association (NCBA), 97 percent of American farms and ranches are owned and operated by families. The estate tax is considered to be one of the leading causes of the breakup of multigenerational farms and ranches.
Farm and ranch estates are five to 20 times more likely to incur estate taxes than other estates. According to the USDA Economic Research Service, one in 10 farm estates (farms with sales of $250,000 or more annually) were likely to owe estate taxes in 2009.
Other taxes that could potentially harm Texas ranchers include capital gains taxes, and income and dividend tax increases.
If Congress continues to sit idle on these taxes, the 33 percent income tax rate could return to 36 percent. The 35 percent rate would return to 39.6 percent. These increased tax rates would affect small business, including ranching families, earning at least $200,000 annually. The current 15 percent capital gains tax will increase to 20 percent. The dividends tax rate will increase from 15 percent back to income tax rates, which means up to 39.6 percent.
“Win or lose, members of Congress must come together during the Lame Duck session to reform taxes that are scheduled to expire at the end of this year,” Scott continued. “If they fail to do so, Texas ranchers will pay the price.”
The Texas and Southwestern Cattle Raisers Association is a 133-year-old trade organization. As the largest and oldest livestock association in Texas, TSCRA represents more than 15,000 beef cattle producers, ranching families and businesses who manage approximately 4 million head of cattle on 51.5 million acres of range and pasture land, primarily in Texas and Oklahoma. TSCRA provides law enforcement and livestock inspection services, legislative and regulatory advocacy, industry news and information, insurance services and educational opportunities for its members and the industry.