The House of Representatives voted 225 to 200 on Thursday to extend 2009 estate tax law into 2010 and beyond.
The tax is set to expire at the first of the year and come back in 2011 at a higher rate. The bill passed Thursday, H.R. 4154, would install permanently 2009’s exemption of $3.5 million per person and the 45 percent tax rate, without an index for inflation.
It is unclear how the politics or timing of this issue will play out in the Senate.
Earlier in the year, the Senate endorsed as part of its budget resolution a proposal from Sen. Jon Kyl (R-Ariz.) and Senate Agriculture Committee Chairman Blanche Lincoln (D-Ark.) that would include a $5 million exemption and make 35 percent the top rate.
Regardless of whether or not that proposal could again gain support, the health care debate is unlikely to stop for the estate tax or other time-sensitive issues. In light of this, there is some talk of tacking a one-year extension of the tax onto an omnibus appropriations bill to avoid the measure’s expiration.
NAWG and 90 other organizations signed onto a letter sent Monday asking House leaders to consider H.R. 3524, which would exclude farm assets from estate taxes for as long as the property remains as a family agricultural operation.
In the letter, addressed to Speaker of the House Nancy Pelosi (D-Calif.) and House Minority Leader John Boehner (R-Ohio), the groups expressed general support for estate tax reform and told them “it is essential that Congress additionally deal with the unique problems that farmers and forest owners face with generational family transition.”
The estate tax has been historically burdensome for family farming operations with the majority of asset value tied up in land. The groups told Pelosi and Boehner that by 2011, one in 10 farm estates would be hit by the tax.
NAWG policy calls for a $10 million maximum on which no estate tax would be paid.
The full letter is online at www.wheatworld.org/issues/othercorrespondence/.