NAWG joined a coalition of 30 agricultural organizations in writing Members of Congress this week to urge action to create a workable, permanent estate tax policy.
Concerns about the effect of the estate tax on agricultural and other small business are at a fever pitch as Congress returns for a lame duck session. Existing law provides for no estate tax at all in 2010, but taxes on estates over $1 million at up to 55 percent come Jan. 1.
Groups writing this week told Members that if estate taxes are allowed to be reinstated at the beginning of 2011 as planned, the negative impact on the agricultural industry will be significant. The American Farm Bureau Federation has estimated such a low exemption level would mean up to 10 percent of farms and ranches whose operators die next year could owe the steep tax.
In this week’s letter, the groups expressed support for permanently raising the estate tax exemption to no less than $5 million per person and reducing the top rate to no more than 35 percent, with provisions to index the tax to inflation, provide for spousal transfers and include a stepped-up basis.
Senate Agriculture Committee Chairman Blanche Lincoln (D-Ark.) and Sen. Jon Kyl (R-Ariz.) have put forth a proposal that follows these guidelines, which NAWG and other agricultural groups support.
The groups also described in the letter how the estate tax is particularly hard on agricultural operations, which hold much of their assets in land that must often be sold to pay the tax.
The letter reminded Members that family farmers and ranchers operate small businesses, whose operators are hard-pressed to make business decisions or take on projects that will grow their businesses with uncertainty in the estate tax from year to year.
“[Change to existing law] will strengthen the business climate for farm and ranch families while ensuring agricultural businesses can be passed to future generations,” the groups told Members.
“Allowing estate taxes to be reinstated without an exemption and rate that protects family farms puts many operations at risk and threatens succession to the next generation of farmers.”
To read the full letter sent this week, please visit www.wheatworld.org/othercorrespondence.