House Passes Permanent Estate Tax Relief Bill

Amanda Nolz

Kisses If you’re like me, then you have been watching closely the progress of the Estate Tax Relief Bill. As the average age of the American farmer or rancher nears 60, agriculture businesses will start switching hands, and unfortunately, poor succession planning can result in the end of a long-standing family tradition. Here is a release that was published in Hoosier Ag Today about this estate tax relief bill…

H.R. 4154, the Permanent Estate Tax Relief for Families, Farmers, and Small Businesses Act of 2009, passed in the House of Representatives Thursday by a vote of 225 – 200. Introduced by North Dakota Representative Earl Pomeroy, the bill would permanently extend the death tax. It would exclude amounts up to 3.5-million single and 7-million married, and permanently set the death tax rate at 45 percent. Under current law the death tax would expire in 2010. According to Palmeroy, “This bill will provide full and permanent estate tax relief for 99.75 percent of families, farmers, and small businesses in this country, who would not have to pay any estate tax.” Pomeroy adds, this bill will, “Provide the stability families need to make long-term decisions and avoid the estate planning roller coaster that will result from current law.”

Country Living, Government, Livestock

Comments 14

  1. I wonder, how many readers of AgWired have family-owned farms worth in excess of $7 million? And for those who do, how many have “poor succession planning [which] can result in the end of a long-standing family tradition”?

    My guess would be zero.

    To my knowledge, no family has ever had to sell their farm to pay the estate tax, even when the taxable threshold was much lower than it is now.

  2. I wonder, how many readers of AgWired have family-owned farms worth in excess of $7 million? And for those who do, how many have “poor succession planning [which] can result in the end of a long-standing family tradition”?

    My guess would be zero.

    To my knowledge, no family has ever had to sell their farm to pay the estate tax, even when the taxable threshold was much lower than it is now.

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  5. Dan,
    It is not just the agricultural community that would benefit from a repeal of Death Tax, it is our country as a whole. And that is why every Republican and a small handful of courageous Democrats voted against this bill.

    Remember, this bill is NOT inflation indexed.

    Many of the ranches in my neck of the woods are worth more than 3.5 million right now, not to mention what they will be worth 15 years from now when current owners who may be 65 would be near life expectancy.

    According to a study by Douglas Holtz-Eakin, former Director of Congressional Budget Office (CBO), eliminating the death tax could have dramatic positive effects on the economy and spur job creation. According to the analysis, a repeal of the tax could have the following results:

    • Increase small business capital by over $1.6 trillion.

    • Increase the probability of hiring by 8.6 percent.

    • Increase payrolls by 2.6 percent.

    • Expand investment by 3 percent.

    • Create 1.5 million additional small business jobs

    • Reduce the current jobless rate by .9 percent.

    Eliminating the tax would increase the incentive to raise and expend capital because it directly punishes wealth accumulation and transfer. Thus, repealing the tax would have an impact on both existing small businesses and farms that generate wealth and those who receive wealth in a transaction after death. According to the Small Business Administration (SBA), small businesses and firms employ more than half of all U.S. workers.

  6. Dan,
    It is not just the agricultural community that would benefit from a repeal of Death Tax, it is our country as a whole. And that is why every Republican and a small handful of courageous Democrats voted against this bill.

    Remember, this bill is NOT inflation indexed.

    Many of the ranches in my neck of the woods are worth more than 3.5 million right now, not to mention what they will be worth 15 years from now when current owners who may be 65 would be near life expectancy.

    According to a study by Douglas Holtz-Eakin, former Director of Congressional Budget Office (CBO), eliminating the death tax could have dramatic positive effects on the economy and spur job creation. According to the analysis, a repeal of the tax could have the following results:

    • Increase small business capital by over $1.6 trillion.

    • Increase the probability of hiring by 8.6 percent.

    • Increase payrolls by 2.6 percent.

    • Expand investment by 3 percent.

    • Create 1.5 million additional small business jobs

    • Reduce the current jobless rate by .9 percent.

    Eliminating the tax would increase the incentive to raise and expend capital because it directly punishes wealth accumulation and transfer. Thus, repealing the tax would have an impact on both existing small businesses and farms that generate wealth and those who receive wealth in a transaction after death. According to the Small Business Administration (SBA), small businesses and firms employ more than half of all U.S. workers.

  7. As a progressive tax, the estate tax serves an important purpose in our economy. The preservation of the estate tax is essential to the government’s ability to finance important policies and projects, as well as promote the democratic ideals that serve as the foundation of our government. Some believe that an extension of the 2009 estate tax policy serves as a tax break for the ultra-wealthy, and is ultimately inadequate for the needs of the American people. For more information visit:http://www.faireconomy.org/news/estate_tax_action_alert_12-7-09

  8. As a progressive tax, the estate tax serves an important purpose in our economy. The preservation of the estate tax is essential to the government’s ability to finance important policies and projects, as well as promote the democratic ideals that serve as the foundation of our government. Some believe that an extension of the 2009 estate tax policy serves as a tax break for the ultra-wealthy, and is ultimately inadequate for the needs of the American people. For more information visit:http://www.faireconomy.org/news/estate_tax_action_alert_12-7-09

  9. But, if you ranch or farm in Minnesota you are subject to a state estate tax for anything over $1 million and that does leave a lot of ranches and farms within reach of government taxation and a heavy tax burden for the next generation. I know few operations not worth that amount in Minnesota. So the Federal estate tax lock does little for relief on our state level.

  10. But, if you ranch or farm in Minnesota you are subject to a state estate tax for anything over $1 million and that does leave a lot of ranches and farms within reach of government taxation and a heavy tax burden for the next generation. I know few operations not worth that amount in Minnesota. So the Federal estate tax lock does little for relief on our state level.

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