Lincoln, Kyl Introduce Death Tax Reform Proposal
WASHINGTON - NCBA and the Public Lands Council are strongly supporting an amendment by Senators Blanche Lincoln (D-Ark.) and Jon Kyl (R-Ariz.) to bring meaningful and permanent reform to the estate tax.
"For far too long, farmers and ranchers have faced uncertainty when it comes to planning ahead for the future of their estates," said NCBA President Steve Foglesong. "The Lincoln-Kyl amendment would provide much-needed relief to allow producers to keep their family farms in operation and pass them down to future generations."
The Lincoln-Kyl proposal would require the Senate Finance Committee to amend H.R. 5297, the Small Business Lending bill, to permanently set the estate tax rate at 35 percent, with a $5 million exemption amount phased in over 10 years and indexed for inflation. It would also provide a "stepped up basis" for inherited assets.
Only 30 legislative days are left on the Congressional calendar until the estate tax reverts back to its staggering pre-2001 levels. If Congress fails to act, starting Jan. 1, 2011, farm estates worth a mere $1 million will be taxed at a rate of 55 percent.
The estate tax, commonly known as the "death tax," disproportionately hits agriculture. Ninety-seven percent of American farms and ranches are owned and operated by families, and the tax is considered one of the leading causes of the breakup of multigenerational family farms and ranches. Farm and ranch estates are five to 20 times more likely to incur estate taxes than other estates. According to the USDA Economic Research Service, one in 10 farm estates (farms with sales of $250,000 or more annually) were likely to owe estate taxes in 2009.