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U.S. ag leaders push to extend estate tax breaks past Dec. 31
By STEVE BINDER
Illinois Correspondent

WASHINGTON, D.C. — With heated elections for Congress and the White House just around the corner, U.S. farm leaders say they don’t expect major tax policy changes before November ballots are cast.

But that doesn’t mean they are letting up on the gas when it comes to lobbying Congress for action on the estate tax, which they are pushing for before major changes kick into gear by Dec. 31. The American Farm Bureau Federation (AFBF) and 25 other ag and business groups have signed on as strong supporters of the Small Business Tax Extenders Act, sponsored by U.S. Sens. Mary Landrieu (D-La.) and Olympia Snowe (R-Maine).

One of the main provisions of the act would be to continue current levels for the federal estate tax, which these days the groups say are critical to farm families given the skyrocketing rise in farmland values during the past two years. Conventional wisdom in the Capitol, though, is that little or no tax policy action will take place before the Nov. 6 elections, said AFBF tax policy specialist Pat Wolff.

Getting on board to support current estate tax provisions is important because Congress will have little time to consider numerous other tax issues, among other topics, Wolff said.
At the end of 2010, Congress passed legislation that exempted any estate worth $5 million or less for individuals, and $10 million for couples, from federal estate tax and set rates for estates valued at more than these at 35 percent. Previous limits were $1 million for estates, with rates at 55 percent.

Without Congressional action before Dec. 31, the exemption level goes back to $1 million and the estate tax goes back to 55 percent. “If things go the way we think, there likely won’t be any separate vote on the estate tax. It will be one giant tax bill,” Wolff said.

“They only have three or four weeks after the election. We’re pounding away, saying, ‘You can’t let this happen. We can’t go back to $1 million.’ We need to keep what we’ve got at the end of the year.”

There are several other Bush-era tax breaks from 2001-03 that are set to expire at the end of this year, including capital gains relief, current income tax rates, marriage tax penalty relief and child credits.

Eddie Thompson, a fourth-generation farmer from southern Illinois who has 2,400 acres in his family, said he doesn’t follow politics closely but said a measure of tax fairness is required from those in Washington.

“I understand everyone’s hurting these days, but governments have to learn to do more with less,” he said. “Any tax rate above 25 percent, to me, is excessive.”

Ag groups such as the AFBF aren’t alone in their push for continuation of current estate tax provisions. The nation’s certified accountants back the measure, too.

In written testimony provided to Congress, the American Institute of CPAs said: “The uncertainty of the tax law impedes proper estate planning for taxpayers, and the necessity to revise estate planning documents multiple times places an undue burden on taxpayers and the advisors.

“In addition, if no Congressional action is taken, on Jan. 1, 2013, the 2001 legislation will sunset, which will create turmoil for gifts to multigenerational trusts.”
6/27/2012