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Farm groups descend on the capitol to promote ag issues

I’m writing this week from 27,000 feet, en route from Port Columbus International Airport to Washington D.C.’s Reagan National Airport. I’m spending a few days in our nation’s capital with members of the Ohio Cattlemen’s Assoc. attending the National Cattlemen’s Beef Assoc. Fall Legislative Conference.

ABN Radio’s Lindsay Hill, meanwhile, is covering the Ohio Pork Producers’ Council’s annual trek to Washington, and members of the National Farmers Union are likewise inside the Beltway this week. It’s a busy time of year for farmers, but several hundred will hit the Hill this week to carry some important legislative messages to their Congres-sional representation.

I love Washington. I lovingly call it “The Swamp,” for both literal and figurative purposes. But as the geographical representation of what makes America unique, special, and different from any other nation in the recorded annals of history, the city holds a place in my heart.

Certainly one of those “nice to visit, but I wouldn’t want to live there” type of towns for my taste, D.C. is a pilgrimage I typically make two or three times each year covering various ag-related events and endeavors.

Every American should be involved in the political process in some way at some level. From the most sacred act of voting to holding elective office, the participation of the citizenry is the hallmark of this great Republic.

This week farmers, the original ranks from which the Founding Fathers mostly originated, share their unique views, perspectives and priorities with the elected class. These visits are valuable for both the farmer and the legislator, as both parties hopefully walk away with a much more informed viewpoint on the top issues of the day.

This week, from a beef industry perspective, members of the cattlemens’ associations will encourage legislators to deal with, among others, two key priority issues: the estate tax and the proposed GIPSA rule.

The “Death Tax” is one of the most pernicious issues facing farmers and small business owners today. Currently in a state of flux, the Estate Tax today is literally at zero. Because of prior legislation that reduced the tax rate and raised exemption levels over a period of years, theoretically until a long-term compromise could be achieved, 2010 is a watershed year. The tax sunset for a period of one year at midnight on Dec. 31 and will return with full force on Jan. 1, 2011.

With a rate of 55 percent and an exemption rate of only $1 million, one could argue that the return of the death tax is the largest single tax increase in my lifetime, perhaps in the last half century.

For obvious reasons, this tax is the doom of farm families and small businesses. Particularly in an industry like food production, when a business’ value is tied up in real estate, machinery, and livestock, the liquidity of an estate can rarely meet its tax burden without forced sale of assets. This might mean a family choosing to sell the farm to meet such an onerous tax burden.

Philosophically speaking, the death tax is the second, third or fourth time the same dollar is taxed. If a man earns a dollar, it is taxed as income tax. If he invests that dollar in the form of buying a farm or business, it is taxed as sales tax. If he sells a portion of that property, the dollar is taxed as capital gains. If he retains the asset, he’ll likely pay property tax. And finally, when his remains are returned to the Mother Earth, his heirs will pay tax on that dollar yet again.

While in Washington, cattlemen will also discuss the government’s proposed control of the livestock markets through USDA’s Grain Inspection Packers and Stockyards Administration (GIPSA) rule, now in the public comment period.

Reaching well beyond the intent of Congress in the most recent farm bill, the GIPSA rule as written will put the federal government squarely in the role of not only regulating, but controlling and manipulating the livestock markets.

The free market system is predicated upon free, fair, and open markets. USDA’s proposal, in the minds of producers in D.C. this week, has stepped completely over the role of responsible regulation into the realm of unreasonable control.

These are two of the several issues under discussion in Washington this week. With Congress in session for less than three more weeks ahead of the midterm elections, time is short to accomplish reasonable legislation on these issues. Nonetheless, in the midst of one of the busiest times of the farmers’ year, here we are, climbing Capitol Hill.

The views and opinions expressed in this column are those of the author and not necessarily those of Farm World. Readers with questions or comments for Andy Vance may write to him in care of this publication.

9/22/2010