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Estate tax ‘certainty’ is appreciated

January 25, 2013 By Leave a Comment

Farm business advisors are pleased that the federal estate tax law is now permanent. Nebraska Farm Business director Tina Barrett says having that certainty will make it easier to do estate planning. 

“There’s no expiration date on it,” Barrett says. “A lot of times, what we’ve dealt with in the last couple years, is that we got a two-year extension and then it expires—and they have to act in order to change it. 

“Well, this is a ‘forever’ law, until they change it.  So it’s going to take an act of Congress to change it—which is a much bigger difference and a much better planning tool for what we’ve got to deal with.” 

The new law left the estate tax exemption at five million dollars per person and ten million dollar per couple.  However, the tax rate increased from 35 to 40 percent.

Filed Under: Events/Organizations, News Tagged With: , , ,

Still trying to find a compromise

December 20, 2012 By Leave a Comment

As talks continue to surround the fiscal cliff, American Farm Bureau Federation Tax Specialist Pat Wolff says a lot of uncertainty remains about what exactly is going to happen. “Certainly the President and the Speaker of the House have been talking on and off about trying to pass a compromise and trying to pass legislation that would avert this fiscal cliff on January 1,” she says. “But, they haven’t got that done yet and whether or not they can – we’ll have to see. We are running out of time.”

If the fiscal cliff is not averted, Wolff says there is a very long list of taxes that would go up.  That list includes the Estate Tax and the Capital Gains Tax.

The House is scheduled to vote on House Speaker John Boehner’s Plan B Bill later today.  Plan B would permanently lock in tax rates on annual income under $1 million.

Filed Under: News, USDA/Government Tagged With: , , ,

Some well-known wealthy want higher estate tax

December 11, 2012 By Leave a Comment

A group of prominent millionaires and billionaires wants to preserve the estate tax and proposes stricter guidelines than even those of the Obama administration. Bill Gates Senior, Warren Buffett, former Treasury Secretary Robert Rubin, Richard Rockefeller and Abigail Disney are among those signing onto the plan.

Their proposal would make the estate tax exemption $4Million per couple with a graduating tax rate of 45 to 55%. By contrast, Obama’s plan would revert back to 2009: $7Mill. Per couple exemption, 45% flat tax rate.

Michael Lapham, director of the Responsible Wealth Project with United for a Fair Economy, says the argument that family farms will be driven out of business is a ‘red herring’, “The reality is, only 40 small farms and businesses are expected to pay any estate tax in 2012, according to the Tax Policy Center. Those that would – would pay about 3.1% of the estate’s value, on average,” Lapham says. He adds, “We certainly don’t want to be harming small businesses and farms but we also don’t want to keep answering an argument that isn’t really based in fact.”

Brian Miller, director of United for a Fair Economy, says exempting farms from the estate tax is proven by economists to be a bad idea because it would cause a lot of very wealthy people to buy up farmland to shelter their wealth from death taxes. Miller says, “The effect of that would be to basically push up the price of farmland, push family farmers off their own land and turn them into tenants leasing land. I mean, it would just create some extremely unhealthy dynamics that would actually be more harmful to farmers than beneficial.” He adds there are provisions in the estate tax, such as paying it out over 15 years, that would make it manageable for farms and small businesses.

Abigail Disney, the granddaughter of Walt Disney, says paying her fair share is only right, “It’s only right and appropriate that I should pay a tax to repay society’s investment in making all that wealth accumulation possible. Not just the wealth my grandfather made in business but the wealth that I managed to build with the head-start my grandfather left me.”

The group is looking for a Senate sponsor. They say their estate tax plan will create much needed revenue to help bring down the federal deficit and avert the so-called Fiscal Cliff.

AUDIO: Conference Call – United for a Fair Economy (57:00 mp3)

Filed Under: Events/Organizations, Human Interest, News, USDA/Government Tagged With: , ,

Discussing the issues with NCBA president J.D. Alexander

December 10, 2012 By Leave a Comment

Cattle feeder J.D. Alexander of Pilger, Nebraska is the president of the National Cattlemen’s Beef Association.  He’s been traveling all over the country in recent weeks, meeting with and speaking to various state cattle organizations.  We caught up with Alexander at the Iowa Cattlemen’s Association meeting this week and asked him about a myriad of topics including the drought, RFS, EPA, the estate tax and the animal rights movement.  We also discussed whether NCBA will pursue an increase in the beef checkoff.

AUDIO: J.D. Alexander (10:01 MP3)

Filed Under: Feature Programs, Rural Issues Tagged With: , , , , , , ,

Battling the Estate Tax issue

December 6, 2012 By Leave a Comment

If the Estate Tax issue isn’t resolved by years end – the current exemption would roll back from $5 million to around $1 million.  Rick Morgan, Sr. Financial Security Consultant with Country Financial says that has the agriculture industry very worried – and rightfully so.  “That would expose a lot of potential farm property to Estate Taxation when the current farm owner passes when they are trying to pass their farm on to their family,” he says.

And because most farm families don’t have a lot of liquid or cash assets on hand he says, “There is a fear that a lot of farm real estate would have to be sold in order to meet the increased tax liability.”

Morgan tells Brownfield he thinks the solution lies somewhere between the previous and current exemptions.  “In 2009 our exemption was $3.5 million,” he says.  “I think that’s kind of where we may be headed.  That would also entail a maximum tax rate of 45 percent, currently it is 35 percent.  If they don’t reach an agreement it would go all the way up to 55 percent.”

While they would like to keep the current tax law – the $3.5million exemption with 45 percent top tax rate is a better option the potential $1 million exemption at a 55 percent tax rate.

AUDIO: Rick Morgan, Estate Taxes (2:50mp3)

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More from Iowa Farm Bureau’s meeting

December 5, 2012 By Leave a Comment

The farm bill, the estate tax and the Mississippi River—those are some of the topics we discussed Tuesday with Iowa Farm Bureau’s director of research Dave Miller at the group’s annual meeting in Des Moines.

AUDIO: Dave Miller (4:35 MP3)

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Still time for a Farm Bill

November 29, 2012 By Leave a Comment

Yvonne Lesicko, Sr. Director of Legislative and Regulatory Policy for the Ohio Farm Bureau believes that by the end of the week we may have a better idea the direction Congress will take with regard to the 2012 Farm Bill, which means there is still time to contact members of Congress. Oh, and while you’re at it, you might want to mention the need to extend the estate tax provisions.

Audio: Yvonne Lesicko, Ohio Farm Bureau Federation (3:25 mp3)

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Another push for estate tax relief

November 14, 2012 By Leave a Comment

More than 30 groups representing the ag industry have sent letters to members of Congress urging them to provide farmers and ranchers with permanent and meaningful relief from the estate tax.

The current estate tax levels of five million dollars and 35 percent expire at the end of the year.  Unless Congress acts, those levels go to one million dollars and 55 percent.

Kent Bacus of the National Cattlemen’s Beef Association (NCBA) says that would have a devastating impact on the cattle industry.

“Instead of being able to take the necessary risks to invest, or to cope with the increasing input costs that we see right now, they’re going to have to spend that money on lawyers and on people who are going to help them prepare their taxes—or have to fight the IRS,” Bacus says.

Bacus says NCBA continues to seek permanent repeal of the estate tax.

“We’re looking to have an extension of the current rates as they are until permanent repeal is possible,” Bacus says, “and I think as there begins to be more discussion here in the next year about comprehensive tax reform, I think anything is on the table.”

Bacus explains that ranching families are often “land rich and cash poor”, with the appraised value of rural land being extremely inflated when compared to its agricultural value.  He says many cattle producers are forced to spend an exorbitant amount of money on attorneys or sell off land or parts of their operations to pay off tax liabilities.

Filed Under: Events/Organizations, Livestock, News, USDA/Government Tagged With: , , , ,

NCBA optimistic about a Farm Bill this year

November 12, 2012 By Leave a Comment

The balance of power in Washington is the same as a result of the election and Collin Woodall, vice president of governmental affairs for the National Cattlemen’s Beef Association (NCBA), says that’s both bad AND good.

“It’s bad because we had hoped for some changes in order to see some real reform on things such as tax policy and also reforming the endangered species act. That’s not going to happen now. But,” Woodall adds, “It’s also good because we at least know what we’ve dealt with the past two years, so we kind of have a better idea of what to expect. And, that also means that the lame duck session could be a little bit better than maybe we expected, too.”

Woodall tells Brownfield Ag News they see a better chance for the Farm Bill to pass in the Lame Duck session of Congress, before the end of this year.  He says, “One of the reasons why the Farm Bill had really been slowed down is because Republicans had expected to retake control of the Senate and they’d hoped for deeper cuts and that’s not going to happen so there’s no reason not to finish the Farm Bill right now. Let’s get it done, provide some certainty for agriculture, let’s not cloud a new Congress. Let’s get it done. I think we can probably see that. We’re optimistic that we’ll be able to see that done.”

Woodall, who spoke with Brownfield at the National Association of Farm Broadcasting Convention, says NCBA’s biggest concern is the “death tax” – they want Congress to at least keep it at current levels rather than let it revert back to much higher levels.

AUDIO: Collin Woodall (5:00 mp3)

Filed Under: News, Top Stories, USDA/Government Tagged With: , , , , ,

AFBF economist says rural America at risk

October 31, 2012 By Leave a Comment

The American Farm Bureau’s economist says rural America stands to lose a lot if Congress doesn’t fix the so-called “fiscal cliff” before January first.  Matt Erickson says automatic spending cuts to more than one-thousand government programs and the end of tax breaks would “hit all at once.”  For agriculture, he says, the estate tax situation would be dire.

“We would see policy revert back to pre-2001 levels and it’s expected that one out of every 10 farm estates would owe an estate tax if this were to occur,” says Erickson.

The estate tax would be forced down to a one-million exemption and up to a top tax rate of 55 percent, making it much harder for families to pass down their farms to younger members.

Erickson says automatic spending cuts would take 1.2 Trillion dollars from federal programs over nine years and farm programs that go beyond the farm would also be affected. He says,“I think the loser of all this is going to be rural America.”

Erickson says ag research, extension, rural and community development would all take a hit if Congress allows a fall off the “fiscal cliff.” All the more reason, he says, to urge Congress to take care of the situation in 2012.

 

Filed Under: Crops, Dairy, Human Interest, Livestock, News, USDA/Government Tagged With: , , , , ,
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