The estate tax is levied on the net value – less an exemption – of an owner’s assets transferred at death to an heir or heirs. The Economic Growth and Tax Relief Reconciliation Act of 2001 raised the exemption amount and reduced the tax rate over time for the estate tax. Under the 2001 law, the 2009 estate tax exemption was set at $3.5 million with a maximum tax rate of 45 percent; for 2010 the estate tax was repealed.
But without congressional action, the 2011 estate tax exemption will revert to its pre-2001 amount of $1 million, with a tax rate of 55 percent plus an extra 5 percent for estates valued over $10 million. Numerous proposals have been introduced in Congress to repeal or modify the estate tax law.
“If the estate tax isn’t fixed, my son could be facing a huge tax bill when he inherits my property and other assets,” said NPPC President Sam Carney, a pork producer from Adair, Iowa. “Congress needs to significantly reduce the estate tax burden or eliminate it so that family farms like mine can remain in the family.”
NPPC supports efforts to repeal the estate tax or to permanently extend the 2001 estate tax law, both of which would protect farms for future generations of farmers.
At a press conference with other agricultural organizations asking lawmakers to address the estate tax matter during Congress’s lame-duck session, Chris Wall, NPPC assistant vice president for government relations, said, “If Congress and the Obama administration really want to protect jobs and repopulate rural America, they ought to eliminate the estate tax, which if not at least fixed will affect 1-in-10 farms next year.
“U.S. pork producers, like other American farmers, deserve better for their hard work than being taxed in death, to death.”
According to the Heritage Foundation, the estate tax raises only about 1 percent of federal revenues but at a cost to the economy of about 1.5 million jobs a year.
Source: NPPC
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