Kyl and Lincoln Try Again on Death Tax FixThu, 15 Jul 2010 6:48:04 CDT
Senators Blanche Lincoln and Jon Kyl have developed an estate tax proposal that they hope to attach to a small-business lending bill that awaits Senate action. The proposal would gradually drop the top estate tax rate to 35-percent, set the per person exemption at five-million dollars and index it to inflation. A bill passed by the House last year would set the estate tax at a 45-percent top rate with a 3.5-million dollar per person exemption. If Congress fails to take action the estate tax will return January 1st at a top rate of 55-percent and a one-million dollar per person exemption. Kyl notes it would be the largest tax hike on American taxpayers in history. He says lack of action creates a tremendous amount of uncertainty for the nation's families, small business owners and farmers. Uncertainty he says - is one of the factors preventing a strong economic recovery from taking hold.
The 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.
Click here for the News Release from the Senators with more details of their measure.
Both the National Farmers Union and the American Farm Bureau are apparently on board with the Kyl-Lincoln plan. National Farmers Union is applauding the efforts of Senate Ag Chair Blanche Lincoln and Arizona Senator Jon Kyl to find a permanent solution to the current estate tax code. President Roger Johnson says NFU believes it is imperative that the estate tax exemption be four-million dollars per person and be indexed to inflation, provide for spousal transfers and include the stepped-up basis. NFU is promoting a slightly different level than the proposal of the two lawmakers, but Johnson says the Lincoln-Kyl language is a step in the right direction.
The American Farm Bureau Federation is also in support of the Lincoln-Kyl proposal. Farm Bureau President Bob Stallman sent a letter Wednesday to Senate Majority Leader Harry Reid asking him to allow the Senate to consider the proposal. Stallman says estate taxes can hit farm families harder than other small business owners because 84-percent of farm assets are real estate-based. He says when estate taxes are due - surviving family members may be forced to sell land, buildings or equipment needed to keep their operations going if they don't have enough cash on hand.
When farms and ranches downsize or disappear - Stallman says rural communities and businesses suffer - and farmland close to urban centers is often lost forever to development when estate taxes force families to sell off land to pay the taxes. Stallman states the proposal will give farmers and ranchers a better opportunity to continue food, fiber and fuel production - and transfer family-owned operations from one generation to the next.
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