That impact, as well as their role in complex supply chains, reminds us that the strength of our nation is underpinned by their success.
Our entrepreneurs embody the traits of risk-taking, persistence and growth. Their resilience has echoed across generations. For many, handing the reins of their family business down to the next generation is a lifelong goal that provides the opportunity to build on to an established, proud legacy.
Unfortunately, entrepreneurs and family farmers confront a punitive measure known as the “death tax” –– a federal estate tax that occurs when an asset is transferred to another person, often a family member, after death. This penalty threatens family-owned operations nationwide.
The impact of this tax is especially severe in rural states like Arkansas. Farmers, ranchers and agriculturalists feed, fuel and clothe the world. When faced with a steep and sometimes unexpected tax, they are forced to make difficult decisions including having to sell business equipment and land, downsize employees or close their business altogether to pay the IRS. Instead of being able to reinvest into their family’s businesses, Americans who inherit an operation must immediately pay the death tax and calculate how that will impact their futures.
Not only does this burden harm the families and job creators whose operations have endured for generations, but it also negatively disrupts critical supply chains and domestic production.
To address and mitigate its impacts, I was proud to join Majority Leader John Thune (R-SD) to introduce legislation that would permanently repeal the death tax. The Death Tax Repeal Act would protect the hard work of Arkansans and provide relief from this counterproductive policy.
The good news is there is widespread support for this legislation on both sides of the Capitol, and it is a priority for many members of rural states.
As Chairman of the Senate Committee on Agriculture, Nutrition, and Forestry, I am particularly aware of how the death tax casts a shadow across farming communities.
In a recent committee hearing, Senator Cindy Hyde-Smith (R-MS) called a death tax repeal the most important thing Congress can do “to keeping acreage in production.” With the fragile farm economy, we must take action to protect family farms. This is key to that responsibility.
Congress provided more certainty and predictability to farm families and small businesses by doubling the exemption in 2017, but that is set to expire at the end of the year. As Congress works to extend tax provisions championed by President Trump, we will be working closely with the administration to end this tax.
Earlier this month, U.S. Department of Agriculture Secretary Brooke Rollins affirmed her commitment to repealing the death tax.
Momentum continues to build for axing this destructive penalty in support of our entrepreneurs’ and agriculturalists’ ability to continue to grow their operations and benefit their local economies. This protection will also remove a possible deterrent that discourages Americans from investing in or even creating their own small businesses.
Arkansans understand the value and importance of hard work, building something with longevity and passing it on. Finally removing the death tax will represent an important step forward in promoting economic growth and ensuring the American dream remains within grasp for generations to come.