Wilson County News - Agriculture Today - Congress debates ‘death and taxes’

Wilson County News
December 1, 2009 | 6 comments

The old phrase “nothing is certain but death and taxes,” will soon be the topic of discussion on Capitol Hill, as the inheritance tax approaches expiration.

If existing rates continue, the 2010 rate will be repealed and the tax will be set at zero percent, according to the Internal Revenue Code of 1986. The next year, exemptions would revert to assets exceeding $1 million being taxed at a 55-percent rate.

“When you factor in land and equipment, not to mention rising property values, it’s clear that most farms and ranches would easily exceed the $1 million threshold,” said Texas and Southwestern Cattle Raisers Association (TSCRA) Legislative and Tax Committee Chairman Arthur Uhl, in a Nov. 5 TSCRA press release.

Uhl, a rancher and attorney from San Antonio, testified in Washington, D.C., that “This is a value that most farmers and ranchers will never see in terms of cash, as it is tied up in productive assets that we hope to pass down to the next generation.”

According to the cattle raisers association, President Barack Obama has
proposed a budget that would freeze the rate at 45 percent for estate assets exceeding $3.5 million in value, so it can “be dealt with at a later date.”

The cattle raisers and another farm commodity group, the American Farm Bureau Federation, have endorsed a House bill that was introduced Oct. 22.

The bill, HR 3905, the Estate Tax Relief Act of 2009, introduced by Rep. Shelley Berkley, would increase the estate-tax exemption to $5 million over a term of 11 years, beginning with $3.5 million in 2009 and continuing until 2019. At the same time, the tax rate would decrease from 45 percent to 35 percent during this same time span. This bill will supersede or amend the existing code, if passed.

This bill would also amend the Internal Revenue Code of 1986, which repeals the one-year termination of the estate tax for 2010.

The cattlemen’s group explained the importance for getting this under control.

The estate tax is considered one of the leading causes for the breakup of multi-generational family operations, since 97 percent of all ranchers have been ranching for more than one generation; 15 percent operate a ranch that has been in the family for more than 100 years.

Bob Stallman, president of the American Farm Bureau Federation, echoed Uhl’s sentiments. In an Oct. 23 statement, Stallman said, “Estate taxes threaten family-owned farms and ranches and the livelihood of families who make their living in production agriculture. Eighty percent of farm and ranch assets are land-based. When estate taxes exceed cash and other liquid assets on hand, surviving family members can be forced to sell land, buildings, or equipment needed to keep their businesses operating. Sadly, it takes two and a half years of farm returns for a moderate-sized farm operation to pay off the estate tax owed.”

Proposed Inheritance Tax Rates

Year
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019 or thereafter

Exclusion Amount
$3,500,000
$3,650,000
$3,800,000
$3,950,000
$4,100,000
$4,250,000
$4,400,000
$4,550,000
$4,700,000
$4,850,000
$5,000,000

Top tax rate (%)
45
44
43
42
41
40
39
38
37
36
35

Your Opinions and Comments

Rock'n chair Rambler
Over Taxed, TX
December 3, 2009 12:41pm

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I like it! A national sales tax instead of income tax. The only thing I wouldn't like about it would be the necessity to tax internet sales, but they're working on closing ... Read More

Ken Semlinger
Poth, TX
December 3, 2009 11:35am

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4th, you have summed up the argument against estate tax increases and estate taxes themselves in your last excellent paragraph. I believe a national sales tax and constitutional ... Read More

4th Generation Texan
Sutherland Springs
December 3, 2009 11:02am

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I would like to see ALL taxes of every kind Suspended for about 3 to 6 months. During that time, the current tax codes should be completely nullified. Then, a really cool ... Read More

What the....?
Disillusion, TX
December 2, 2009 2:24pm

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"a tax break for millionaires"???

I guess some folks don't read too good. Well, that figures. What part of "redistribution of wealth" don't these ... Read More

Hannah McLeod
December 2, 2009 1:38pm

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Some believe that an extension of 2009 estate tax policy is a tax break for millionaires rather than a progressive tax essential to the preservation of democracy and funding ... Read More

2010 Begins the End Pendulum Swings December 1, 2009 5:31pm	Report Abuse The chances of getting that bill passed and signed by Obama?..... about slim and none.