The U.S. House of Representatives today voted to extend the current tax code for another year. This includes keeping the estate tax, known as the death tax, at its current level of 35% for estates worth more than $5 million per individual and $10 million per couple.
Tackling the death tax is the top priority for the National Cattlemen’s Beef Association. The death tax directly affects family-owned small businesses, such as farms and ranches, because of the burden it places on families hoping to pass their business on to the next generation.
Even though full repeal of the death tax is the top priority for NCBA, Kent Bacus, associate director of legislative affairs, says the plan passed by the House today is a step in the right direction.
“The good news is that the House-passed tax package provides a continuation of current estate tax relief through 2013. NCBA encourages both the House and Senate to keep the estate tax provision in any final tax package,” said Bacus.
If Congress fails to act by the end of 2012, the death tax will revert to a $1 million exemption level at a 55% tax rate.
“Most farmers and ranchers would trip the $1 million threshold on land values alone. Land values are through the roof and all of the assets it takes to operate a farm or ranch, including livestock, farm machinery and more, would hit the majority of farm and ranch families throughout the country,” said Bacus. “This is not a tax on the wealthy. We must find permanent relief or risk taking land out of production agriculture, threatening our ability to provide food for U.S. consumers and abroad.”
The House is scheduled to discuss the future of comprehensive tax reform on Thursday.
“If Congress is serious about comprehensive tax reform, it must provide permanency in the tax code and provide permanent relief from the death tax. Farmers and ranchers already face unpredictable conditions such as the weather and input costs, but the tax code should not be an unpredictable situation they should face,” said Bacus. “Until full repeal of the death tax can be achieved, at minimum, Congress should maintain the current estate tax relief.”
The American Farm Bureau has also voiced concern about the tax. To learn about an AFBF report on the topic, click here.