Agricultural News
Stripped Down One Year Extension of Farm Bill in Affordable Taxpayer Relief Act Passed by US Senate
Tue, 01 Jan 2013 14:49:41 CST
Three hours into the new year- the US Senate voted strongly in favor of the "Affordable Taxpayer Relief Act" which will keep income tax rates from rising for returns from individuals with earned income less than $400,000- or $450,000 for a couple. It makes permanent the so called "Bush Tax Cuts" for those under this threshold- and apparently also offers a permanent solution to the Alternative Minimum Tax which has had to be patched annually in recent years- keeping it from snaring millions of Americans with an even higher tax bill in 2012.
And- very important for the farm and ranch community- the bill offers some permanence for the levels of exemption found the last two years in the Estate Tax. The exemption levels now have been set in this Senate passed measure at five million dollars for an individual and ten million dollars for a couple. The tax rate for everything in the estate above those thresholds is set at 40 percent, up from the 35 percent level that had been in force the last two years. Very importantly for future years- the exemption amounts are indexed for inflation, which was fought for by several key Republicans and Democratic Senator Max Baccus.
The measure also includes a limited one year extension of the 2008 farm law. It will extend the farm safety net for another crop year (2013) and will extend the Dairy program- minus the reforms that had been proposed by the both the Senate Farm Bill and the one passed by the House Ag Committee in 2012. While the Senate package did not include the latest dairy reform, it does slightly modify the MILC program. It largely set the parameters for FY13 as they were in FY12. The MILC program automatically reverted to a more austere version on September 1 (this was done in the 2008 farm bill to save money). The Senate bill would remove that provision and largely would allow MILC to function as it did in FY12. Since the reforms are not a part of this one year extension, it remains to be seen in the ranking minority member of the House Ag Committee, Collin Peterson of Minnesota, will be willing to support the Senate passed measure or not.
The most obvious missing component of the Senate extension within the Fiscal Cliff bill is not reinstating the Ag Disaster Assistance programs that expired at the end of Fiscal Year 2011- which includes the Livestock Disaster Programs that have been badly needed in 2012.
It does provide funding for the ag export cost share programs like MAP and FMD that are essential to keeping organizations like US Wheat Associates and the US Meat Export Federation funded here in 2013.
To review the entire proposal, click here for the Affordable Taxpayer Relief Act.
Midday Tuesday- Oklahoma Senator Tom Coburn offered the following statement about why he voted in favor of the Fiscal Cliff proposal:
"While this bill is far from perfect, it does prevent massive tax increases while making tax cuts permanent for 99 percent of Americans. Congress and the president, however, have a lot of work to do to address our long-tern spending problem. Our debt - which is 120 percent of our economy if you count federal, state and local debt - is still the greatest threat to our national security. We will never address that threat until Congress and the president acknowledge that the only way to save entitlement programs is to change them."
The House Democratic members had a three hour closed door meeting with Vice President Joe Biden at midday today (January first) and their leaders- including Nancy Pelosi told the media that they are now calling on Speaker Boehner to honor his word and allow the House to have an up or down straight vote. There are no indications as to whether that will occur or not later today- or perhaps on Wednesday.
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