Congress returns to Capitol Hill this week for a final pre-election session with tax cuts expected to lead the agenda. The action begins Tuesday when the Senate will turn to cloture votes on H.R. 5297, the Small Business Job’s and Credit Act of 2010, which includes a number of tax provisions supported by Farm Bureau.
Farm Bureau is also supporting an amendment to the bill by Sen. Mike Johanns (R-Neb.) that would relieve businesses and farms of burdensome Form 1099 reporting requirements that are part of the massive new health care law.
Update: This morning the Senate failed to pass both the Johanns amendment, and a similar amendment by Bill Nelson of Florida. The Nelson amendment would have increased the 1099 reporting requirement and exempted companies with under 25 employees. The Wall Street Journal has commentary this morning outlining why the Johanns legislation was preferable to the Nelson version.
In addition, Farm Bureau is calling on Congress to keep the current income tax structure in place after it expires Dec. 31. Farm Bureau supports lower income tax rates both for families making more than $250,000 per year and for those making less than $250,000 per year.
Farm Bureau’s priority for tax legislation remains estate tax relief. Under current law, there is no estate tax in 2010 and stepped-up basis is limited. Without congressional action, the tax will be reinstated in 2011 with a $1 million exemption, top rate of 55 percent and stepped-up basis. The House passed a bill to provide for a $3.5 million exemption and top rate of 45 percent last December. The Senate has so far failed to consider the Farm Bureau-supported proposal offered by Sen. Blanche Lincoln (D-Ark.) and Jon Kyl (R-Ariz.) to phase in a $5 million exemption and 35 percent rate.
Congress is on schedule to adjourn Oct. 8, but there is talk that adjournment will be even earlier with politicians anxious to hit the campaign trail. It appears now that Congress will wait until a lame duck session to consider the estate tax and other major tax provisions.