It was unfortunate to hear some Congressional leaders portray the reformation of the estate tax to a 35% rate with a $5 million exemption as a benefit for the wealthy elite, he added. On Jan. 1, if the estate tax was allowed to revert back to the pre-2001 level of 55% on property valued at $1 million, many farmers and ranchers would have been forced to sell, further depopulating rural America, he pointed out.
“It was shocking to hear some members of Congress argue against estate tax reform and even attempt to make the case to increase this outdated tax. It is apparent some members of Congress are out of touch with their constituents and the steam engine of economic growth in rural America,” Foglesong said. “I speak for all cattlemen and women when I express my gratitude to those members of Congress who understand the importance of keeping small businesses, including farmers and ranchers, from receiving a financially devastating death sentence on New Year's day.”
The US House of Representatives voted in favor of extending all expiring tax cuts at midnight on Dec. 17, with a vote of 277 to 148. This passage is subsequent to the Senate’s 81-19 vote on Dec. 15.. Once the president signs the bill into law, it will reduce the top rate of the estate tax, commonly known as the death tax, to 35%; increase the exemption level to $5 million; index exemptions to inflation; and include a stepped-up basis.
Estate tax reform was among NCBA’s top policy priorities for 2010, said Colin Woodall, NCBA vice president of government affairs. He added NCBA has had estate tax reform as a top priority for more than two decades.
In 1988, NCBA, which was then the National Cattlemen’s Association, along with the National Federation of Independent Business joined forces to create the Family Business Estate Tax Coalition. The group is now comprised of more than 60 entities ranging from the Air Conditioning Contractors of America to the American Farm Bureau Federation to the National Newspaper Association. Woodall said the Coalition, formed by NCBA, is a well respected advocate and united front for small business owners, including farmers and ranchers.
“The efforts of the Coalition that took place in Washington, D.C., coupled with the outcry from rural America got the attention of Congress. [Dec. 17 was] a great day for cattlemen and women.” Woodall said. “Although we believe permanent repeal of this tax is the best answer, two-year relief for family-owned operations is better than the 55% tax that would leave many farmers and ranchers in a financial ruin.”