Source: Western United Dairymen Weekly Update
The package of tax extensions passed last week by the House and Senate includes estate tax provisions that have drawn the praise of California-based Western United Dairymen (WUD).
The House passed the measure 277 to 148, with 112 Democrats and 36 Republicans voting "no." The package breezed through the Senate earlier this week on a vote of 81 to 19.
The package includes estate tax provisions that include a $5 million individual/$10 million married couple exemption and a top tax rate of 35% on amounts above that. The "stepped-up basis" is returned and the exemption is indexed for inflation. Without passage of the new tax bill, the estate tax would have escalated to pre-2001 levels on Jan. 1, which was a 55% tax rate and an exemption level of $1 million.
"This action is good news for California dairy families who want to be able to transfer assets to the next generation," said WUD President Jamie Bledsoe. "However, this is just a two-year extension. We will continue to push for permanent elimination of the estate tax."
Efforts to reduce or eliminate ethanol incentives fell short as the tax package agreement brokered between President Obama and Republican leaders did not allow for amendments.
WUD legislative advocate Charlie Garrison reports these provisions of interest to dairy producers:
• A one-year extension of the current 45?/gln. blenders’ credit and the 54?/ gln. tariff on imported ethanol are in the tax package.
• The legislation requires Congress to revisit the incentives for corn ethanol in 2011.
• California Senator Dianne Feinstein led the way on a letter to Majority Leader Harry Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.) in opposition to including the ethanol incentives in the tax package. Sixteen of her colleagues, including Senator Barbara Boxer, signed the letter with her.
• Senator Feinstein also tried during floor debate to reduce the credit from 45? to 36?. However, no amendments to the agreement could be allowed or the package would never have been approved.
• The ethanol industry is coming together on a proposal to move the blenders’ credit to a production tax credit for domestic producers only and to phase out the tariff.
• Businesses receive accelerated depreciation on equipment purchases beginning Sept. 8, 2010, and bonus depreciation in 2012.