20 December 2010

3 minute read

North America

He said it was unfortunate to hear some Congressional leaders portray the reformation of the estate tax to a 35 percent rate with a $5 million exemption as a benefit for the wealthy elite. Foglesong said that on Jan. 1, 2011, if the estate tax was allowed to revert back to the pre-2001 level of 55 percent on property valued at $1 million, many farmers and ranchers would have been forced to sell, further depopulating rural America.

“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to hear some members of Congress argue against estate tax reform and even attempt to make the case to increase this outdated tax.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,” said Foglesong. “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, 2010, with a vote of 277 to 148. This passage is subsequent to the Senate’s 81-19 vote on Dec. 15, 2010. 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 percent; increase the exemption level to $5 million; index exemptions to inflation; and include a stepped-up basis.

NCBA Vice President of Government Affairs Colin Woodall said estate tax reform was among NCBA’s top policy priorities for 2010. In fact, Woodall said 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 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. Today is a great day for cattlemen and women. Although we believe permanent repeal of this tax is the best answer, two-year relief for family-owned operations is better than the 55 percent tax that would leave many farmers and ranchers in a financial ruin,” said Woodall. “NCBA has been the leading organization on this issue for many years and we will continue to fight for permanent reform. We can’t wait for two years and then wonder what we are going to do. We will be on Capitol Hill advocating for farmers and ranchers and an end to a tax that penalizes the innovation and hard work of all farmers and ranchers.”

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