The Senate passed an amendment on Death Tax relief in a vote on the budget resolution yesterday, according to the National Cattlemen's Beef Association. The Senate voted 51 to 48 to pass the amendment sponsored by Senators Blanche Lincoln of Arkansas and Jon Kyl of Arizona as well as Senators Ben Nelson, Chuck Grassley, Mark Pryor, Pat Roberts, Mary Landrieu, Mike Enzi, Susan Collins, and John Thune.
"This is a huge victory for America's farmers and ranchers,” said Gary Voogt, NCBA President and rancher from Marne, Mich. "Nearly half of NCBA's members have operations that have been in their families for more than one generation, and they should have the right and the ability to pass these operations on to their children and grandchildren.”
The Lincoln-Kyl amendment would raise the death tax exemption to $5 million per individual and $10 million per couple, indexed for inflation. Under this amendment, the maximum tax rate is reduced to 35%. Currently, estates valued at more than $3.5 million, or $7 million for a couple, are taxed at a 45% rate. President Obama has proposed freezing it at this level so it can be dealt with at a later date. But if Congress doesn't act to freeze or reduce the estate tax, in 2011, it will revert to a staggering 55% tax on estates worth only $1 million or more.
"This vote was a recognition of the extraordinary burden the death tax places on average Americans trying to pass on family cattle operations,” said NCBA Manager of Legislative Affairs Jill Davidsaver. "The amendments don't have the force of law, but they are important guidelines for committees that have jurisdiction over the policies in the amendments.”
"Many farmers and ranchers are what we call ‘land rich and cash poor,'” explained Voogt. "This is not a tax cut for the rich. Cattle producers are often forced to sell off land, farm equipment, parts of the operation, or the entire ranch just to pay off liabilities under the death tax.”
"The majority of the U.S. Senate demonstrated that they realize the importance of reforming this tax,” said Davidsaver. "It sets the stage for further action in reducing this burden on our farmers and ranchers.” NCBA will continue to push for a full repeal of the estate tax, but for now the Lincoln-Kyl amendment is the best option for now.
For questions or comments, e-mail Kim Watson
, editor Beef Today.