Farm Groups Urge Meaningful Estate Tax Relief

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.

Members of Colorado Farm Bureau took this message to Colorado’s congressional delegation earlier this week. Reps. Markey, Lamborn, and Salazar seemed to understand the problem, and Salazar is introducing legislation to help fix the problem. Sen. Udall brushed off suggestions of raising the exemption limit to $5 million, saying that level would effectively repeal the tax. Members reminded the Senator that everyone sitting around the table would be affected by that exemption level and owe at least some tax money.

The return of the estate tax, with its high rate and low exemption, could result in as many as 10 percent of farms and ranches owing estate taxes in 2011, compared with about 1.5 percent of agricultural operations  in 2009, according to the Agriculture Department’s Economic Research Service.

“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.

Joining AFBF in the letter are American Farmland Trust, American Mushroom Institute, American Sheep Industry Association, American Soybean Association, American Sugar Alliance, Farm Credit Council, National Association of Wheat Growers, National Cattlemen’s Beef Association, National Corn Growers Association, National Cotton Council, National Council of Farmer Cooperatives, National Farmers Union, National Grange, National Milk Producers Federation, National Pork Producers Council, National Potato Council, National Turkey Federation, Northwest Dairy Association, Public Lands Council, Southeast Dairy Farmers Association, Southeast Milk Inc., United Egg Producers, United Fresh Produce Association, United Producers, U.S. Apple Association, USA Rice Federation, Western Growers Association and Western United.

(Image: i♥luv♥cocacola)

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