Death Tax Reform More Urgent than New Farm Bill Legislation

Congress adjourned last Friday without new farm legislation to replace the 2008 bill that’s due to expire this coming weekend. North Carolina Farm Bureau Federation president Larry Wooten:

“Its unfortunate that the farm bill was not passed. We had hoped that it would have been passed out of the House. For our farmers and for planning reasons it would certainly have been much better. Realistically, we knew it was a longshot, with the election going on and the concerns of the SNAP program.”
 

With that being said, Wooten explains that of the legislation left undone, there’s another piece that he feels is more important to the farming community in the short term:

“A much more immediate problem that has to be fixed is the Federal Estate Inheritance Tax exemption. If its not renewed by January 1st, that exemption will go from $5 million to $1 million total and then a 55% tax rate from a 35% tax rate. That will be devastating if its allowed to happen. I talked to Senator Hagan last week to urge Congress that we cannot let this happen.”
 

It’s a well known fact that production farmers tend to be capital intensive, yet cash poor, and Wooten explains what reverting back to a $1 million estate tax exemption would mean to farmers:
 

“You can a lot of times see $2 million of farm equipment before you even touch the real estate. This could put a lot of farming families out of business. It would affect a lot of the young farmers, if it would reverse back from the $5 million, it would be devastating to family farms.”
 

Wooten explains that the current estate tax rate is a workable solution;
 

“The best situation is to just eliminate the Federal Estate Inheritance Tax entirely. But the likelihood of that happening is very slim. We can live with where we are right now, with $5 million for a farmer and $5 million for their spouse and a 35% tax rate. That $10 million will take care of more than 90% of the farming operations in the country.”

North Carolina Farm Bureau Federation president Larry Wooten on Inside Agriculture.


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