With current tax relief expected to expire the end
of this year, agriculture groups have been requesting that the U.S. House of
Representatives and the U.S. Senate permanently relieve farmers and ranchers of
the estate tax. Some of the groups encouraging the change include the American Farm Bureau Federation,
American Sheep Industry
Association and National Cattleman’s Beef Association.
After Jan. 1, exemption levels drop to $1 million
per individual and the tax rate increases to 55 percent.
NCBA President J.D. Alexander says, “The fate of
American agriculture and our economic recovery rests on there being certainty
in the tax code and continued relief from the burdensome death tax.”According to Western Farm Press, 31 farm organizations support permanently increasing the exemption level to no less than $5 million per persons and reducing the top rate to no more than 35 percent.
AFBF President Bob Stallman stated earlier this year, “With the average age of a farmer being 58 years old, the estate tax creates even a steeper barrier for young farmers and ranchers to take up the profession at a time when farming is already difficult to enter.”
According to Farm Futures, the NCBA also noted that a large number of ranching families are often “land rich and cash poor,” with the estimated value of rural land being largely inflated considering its agricultural value.
As stated by the Coalition for Agricultural Estate Tax Reform, “The biggest blow is when farm families are forced to re-live estate tax problems in future generations.”
A letter was written and sent to President Obama on Nov. 19, by these organizations. The letter noted that it is “imperative that the exemption be indexed to inflation; provide for spousal transfers; and include the stepped-up basis.”
“The current state of our economy, coupled with the
uncertain nature of estate tax liabilities, makes it difficult for family-owned
farm and ranches to make sound business decisions."
11/28/2012
