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Farm Bureau says it’s time to “put the death tax to rest”

April 13, 2010

AFBF  joined 28 other agricultural groups in urging the Senate to support permanent and meaningful estate tax relief.

In a letter sent Monday to Senate Majority Leader Harry Reid (D-Nev.) and Senate Minority Leader Mitch McConnell (R-Ky.), the coalition warned: “If estate taxes are allowed to be reinstated at the beginning of 2011 with only a $1 million exemption and top rate of 55 percent, the negative impact on our industry will be significant.”

 The coalition called for permanently raising the exemption to no less than $5 million per person and reducing the top tax rate to no more than 35 percent. The farm groups said it is imperative that the exemption be indexed to inflation, provide for spousal transfers and include the stepped-up basis.

The American Farm Bureau Federation joined 28 other agricultural groups in urging the Senate to support permanent and meaningful estate tax relief. In a letter sent Monday to Senate Majority Leader Harry Reid (D-Nev.) and Senate Minority Leader Mitch McConnell (R-Ky.), the coalition warned: “If estate taxes are allowed to be reinstated at the beginning of 2011 with only a $1 million exemption and top rate of 55 percent, the negative impact on our industry will be significant.”

The coalition called for permanently raising the exemption to no less than $5 million per person and reducing the top tax rate to no more than 35 percent. The farm groups said 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, make it difficult for family-owned farms and ranches to make sound business decisions. We urge Congress to pass permanent estate tax reform now,” the letter stressed.

USDA’s Economic Research Service says if the death tax is resurrected next year at the $1 million personal exemption and 55% tax rate, about one in ten commercial farm estates will take an enormous hit.

 According to ERS economists:

Since 2000, farm equity has more than doubled, primarily due to the increased value of farm real estate. As a result, under current law, it is estimated that as many as 1 of every 10 farm estates would owe estate tax in 2011. Total payment amounts that year could increase to about $2.55 billion—nearly 300 percent more than the estimated amount owed by farm estates in 2009.

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