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House Bill Extends Current Estate Tax December 4, 2009

The House yesterday passed, 225-200, H.R. 4154, the Permanent Estate Tax Relief for Families, Farmers, and Small Businesses Act of 2009, introduced by Rep. Earl Pomeroy (D-N.D.).  The bill makes permanent the current estate tax exemption of $3.5 million person and the top rate of 45 percent. The bill was modified by the rule to include statutory pay-go.

During the Rules Committee meeting late Wednesday afternoon, a motion to allow a vote on Farm Bureau supported H.R. 3905, introduced by Reps. Shelley Berkley (D-Nev.) and Kevin Brady (R-Texas), was defeated in a 1 to 7 vote. Farm Bureau commends Reps. Berkley and Brady for attempting to get a vote on their bill to increase the exemption to $5 million person and cut the top rate to 35 percent over ten years.
The House bill exempts the first $3.5 million of an estate, or $7 million for married couples, and taxes inherited wealth above that at 45%, the same as the 2009 rate.  House Republicans say the bill doesn’t go far enough to spare family businesses. “Far too many families have faced the grim prospect of having to sell the family farm in order to pay the taxes due when a loved one dies,” said Rep. Wally Herger of California.
“The newly approved House bill includes no inflationary factor, and according to Peoria Republican Rep. Aaron Schock, it would gradually hit more and more families, farmers and businesses, much like the federal alternative minimum tax (AMT).”

Estate planners don’t like the potential for wild swings in tax rates. “A permanent extension of the estate tax would allow families and business owners to plan with certainty rather than the goofy tax policy that has been in effect since 2001,” said Sarah Spear, policy and public affairs director at the Association for Advanced Life Underwriting.

Julie’s Note: We need to make a way for farm families to transition to the next generation. If estate taxes and other taxes are too high, it makes it prohibitive for the next generation to stay in farming. The average age of today’s farmers and ranchers is 57. In the next couple of decades we’ll see just how easy it is for the next generation to take over the farm. If they can’t we will be depending on other countries to feed us.Wall Street Journal

  • Posted in : General
  • Author : freshair

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