Meat+Poultry - March 2017 - 14

WA S H I N G T O N

'Death tax' debate
While most agree that death and taxes
are two eventualities in life, most
business owners, including meat and
poultry processors, also agree that the
two put together - "death taxes" - form
a lethal combination that can be hurtful
to businesses, especially small ones.
For that reason, members of
Congress are going to take another stab
this year at doing away with estate taxes
- and they may have a better chance of
pulling it off in 2017 than they've had in
a long time. In both the US Senate and
House of Representatives, bi-partisan
legislation has been introduced to get
rid of this onerous tax once and for all.
The Death Tax Repeal Act of 2017 was
introduced by Sen. John Thune (R-SD),
and by Rep. Kristi Noem (R-SD) and
Sanford Bishop (D-Ga.).
Trade associations in the meat and
poultry industry support the repeal
of the tax. The problem is that many
producers and processors, especially
smaller-size businesses, tend to have a
lot of physical assets, but not so much
cash. Much of the estate value can
be in land or buildings, livestock and
animals, and processing equipment.
Yet the law forces these businesses
to pay the tax based on the non-liquid
portions of their assets. Congress has
decided to put most of its energy and
effort into repealing the death tax.

Late last year, Congress tried
current threshold for the exemption
to force a vote aimed at blocking a
excludes a number of family-run
proposed Treasury Dept. rule that
agricultural businesses, forcing heirs
would tighten levies and taxes on
in some cases to liquidate assets to
business inheritances. Time ran
pay estate taxes. Last year,
out for that session-ending
seven Democrats joined 233
vote that would have
House Republicans to pass
"Death taxes"
blocked the Treasury rule
Brady's estate tax repeal
form a lethal
on how partial stakes in
bill by a 240 to 179 vote.
combination that
family-owned businesses
It is easy to see that
can be hurtful
are valued. The Treasury
the debate over whether
to businesses.
Dept. said the rule change
to totally repeal the estate
was intended to prevent
tax has become a partisan
heirs from understating the fair
political issue. Republicans
market value of their estates in order
promote estate tax repeal as a way
to avoid paying taxes. Sen. Thune, a
to preserve jobs and to save small
senior Finance Committee member,
businesses from going under. But
thinks there would be consensus
Democrats mostly disagree with this
support of his proposal to repeal
idea. Democrats such as Minnesota
the estate tax as part of a broad tax
Rep. Keith Ellison argue that full repeal
overhaul in the new 115th Congress.
would mainly provide a windfall to
wealthy investors. There also have
Right now, individuals can inherit
been very big compliance costs levied
estates worth up to $5.45 million
on businesses who must pay this tax.
without being taxed. Estates valued
According to the Joint Economic
over that threshold are taxed at a
Committee, for every dollar of tax
rate of 40 percent, under a bipartisan
revenue raised from the "death tax," a
compromise that was included in
dollar is wasted in compliance costs.
a 2013 fiscal deal. According to
For example, in 2006, it was estimated
Republican Congressional aides, a full
that family businesses spent almost $28
repeal of the estate tax would cost
billion just to comply with the law.
more than $200 billion over 10 years.
With the interests of agricultural
President Donald Trump and the House
businesses and companies at stake, it
Republican "Better Way" agenda both
will be interesting to see if there will
support repealing the estate tax.
actually be enough political support in
A Thune ally, House Ways and
Congress to pull off this repeal.
Means Committee Chairman Kevin
Brady of Texas, argues that the
B E R N A R D S H I R E | m e a t p o u l t r y @ s o s l a n d .c o m

It is easy to see that the debate over whether
to totally repeal the estate tax has become a
partisan political issue.
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Meat+Poultry - March 2017

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