From dawn to dusk, farmers work tirelessly in the field while raising the next generation of producers to carry on the family’s legacy. Like all Americans, farmers experience seasons of abundance and seasons of drought. The feeling of watching a newborn calf walking gangly beside its mother or parking the picker after the final bale of cotton is rolled are certainly great moments farmers rightly relish. However joyous those small moments may be, they are followed by the daily struggles farmers know all too well.
A generational passing-down of farm ownership from grandparents to parents to sons and daughters is a tradition understood and respected across centuries of farming. However, this transition can involve a hefty tax, which often jeopardizes the future of an operation. This looming burden is referred to in the farming community as the “death tax” – or the federal estate tax – and is incurred by the passing down of an estate to heirs after the loss of a loved one.
President Trump signed the Tax Cuts and Jobs Act (TCJA) into law in 2017, which relieved farmers by doubling the estate tax exemption from $5.5 million to $11 million for individuals and linking the exemption dollar amount to inflation.
Unfortunately, the TCJA exemption level will return to $5.5 million on January 1, 2026, if Congress does not act. The effects of this change would be devastating for our nation’s farmers – threatening their very livelihoods and abilities to stay afloat for many. Since President Biden took office in 2021, the farm economy has experienced a 28 percent increase in input costs, including fertilizer, fuel, feed, and labor. In addition, farmers are facing skyrocketing inflation and sky-high agricultural land prices, which are 7.4 percent higher than they were in 2022.
Farmers already face a difficult economic environment and are burdened with constant government interference. That is why action on Senator John Thune’s legislation, the Death Tax Repeal Act (S.1108), is critical to eliminate the death tax and provide farming families with financial relief. Given the economic hurdles our farmers are facing, we should abolish the death tax altogether – or at the bare minimum maintain the increased exemption levels set under TCJA.
America is home to over 2 million farms, with 44,000 of them in Alabama, and 97 percent of farms across the country are family-owned operations. We must protect our family farms and ensure they continue to feed American families for generations to come. As the global population continues to rise and the average age of a U.S. farmer approaches 60 years old, we should cut red tape to let our farmers focus on doing what they do best – farm.
The currently grim economic outlook does not set up the next farming generation for success. Our farmers already make enough sacrifices without having to deal with a hefty tax. Farmers cannot keep up with rising costs without a play change, which is why we are proud to support the Death Tax Repeal Act.
U.S. Senator Tommy Tuberville is the senior senator from Alabama and a member of the Senate Agriculture Committee. Jimmy Parnell is President of the Alabama Farmers Federation (ALFA) and a fifth-generation Alabama farmer.
