One of the most-important issues facing family farmers and ranchers and small business owners nationwide is the future of the estate tax, commonly referred to as the “death tax.”
The death tax is one of the leading causes of the breakup of multi-generation family farms and ranches.
At the time of death, farming and ranching families are forced to sell off land, farm equipment, parts of the operation or the entire ranch to pay off tax liabilities on assets that have likely been taxed two or three times over the course of a lifetime.
This outdated tax is not a tax on the wealthy.
The wealthy can afford accountants and estate planners to help them evade the tax. The death tax hurts family farms and ranches hardest.
Unfortunately, this is not a new issue for farmers and ranchers.
AS YOU may recall, at the end of 2010, Congress and the White House agreed to a two-year tax package that included temporary estate-tax relief.
For now, estates worth more than $5 million per individual or $10 million per couple are taxed at a 35 percent rate.
The two-year estate tax package also reinstated stepped-up basis, indexes the estate tax exemption for inflation and contains a spousal transfer of any unused estate tax exemption amount.
The tax package also included a two-year extension of 2001 and 2003 income tax rates for all income levels, set the capital gains tax rate at 15 percent for two years and included a two-year patch for the alternative minimum tax.
All of these issues must be addressed by the end of 2012.
IT’S TIME, once again, to turn our attention to providing permanent relief from the death tax.
If Congress fails to act by the end of this year, the estate tax will revert to a staggering $1 million exemption with a 55 percent tax rate.
Increasing production costs, rising property values and an uncertain tax code make it difficult to form a business plan, much less plan for the future of your estate.
We cannot afford for the estate tax to continue being a political football that is punted year after year. We need permanency in the tax code.
The National Cattlemen’s Beef Association (NCBA) will work tirelessly seeking full and permanent estate tax relief.
Members of Congress have begun working on this issue.
In fact, Congressman Kevin Brady, R-Texas, introduced the Death Tax Permanency Repeal Act and has support on his legislation from more than 190 bipartisan members of Congress.
The NCBA is a staunch supporter of Brady’s legislation.
If a full repeal is not achievable, the NCBA supports making the 2010 estate tax package permanent.
While there has been some discussion of movement toward comprehensive tax reform in the U.S. Senate and House of Representatives, it is difficult to predict what Congress and the White House will do this year.
One thing is certain: Congress and the White House need to hear from you about why we need permanency in the estate tax.
They need to know that the estate tax is not a political football.
THEY NEED to understand there are no political points to be earned by punting this issue to a later day or by kneeling on the ball to run out the clock.
Join us as we continue to fight for permanent estate tax relief.
Let us hope one of the New Year’s resolutions of Congress and the White House is providing permanent estate tax relief in 2012.
Kent Bacus is manager of legislative affairs for the National Cattlemen’s Beef Association.